Commodity Price Shocks and the Australian Economy since Federation

Bhattacharyya, Sambit; Williamson, Jeffrey G.

doi:10.3386/w14694

Cited by 27 publications

(26 citation statements)

References 30 publications

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“…Therefore, its history allows us to track any potential heterogeneous effects across commodities. Second, Australia offers high quality time series data on both commodity prices (Bhattacharyya and Williamson, 2011) and income inequality measured by top income shares (Atkinson and Leigh, 2007). Third, Australia has experienced more frequent and intense commodity price shocks than many resource rich developing countries.…”

Section: Introductionmentioning

confidence: 99%

Distributional Consequences of Commodity Price Shocks:Australia Over A Century

Bhattacharyya

Williamson

2015

Review of Income and Wealth

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This paper studies the distributional impact of commodity price shocks over the short and the very long run. Using a GARCH model, we find that Australia experienced more volatility than many commodity exporting developing countries over the periods 1865-1940 and 1960-2008. We conduct cointegration tests to assess the commodity price shock inequality nexus. A single equation error correction model suggests that commodity price shocks increase the income share of the top 1, 0.05, and 0.01 percent in the short run. The very top end of the income distribution benefits from commodity booms disproportionately more than the rest of the society. The short run effect is mainly driven by wool and mining and not agricultural commodities. A sustained increase in the price of renewables (wool) reduces inequality whereas the same for non-renewable resources (minerals) increases inequality. We expect that the initial distribution of land and mineral resources explains the asymmetric result.JEL Codes: F14, F43, N17, O13

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Section: Introductionmentioning

confidence: 99%

Distributional Consequences of Commodity Price Shocks:Australia Over A Century

Bhattacharyya

Williamson

2015

Review of Income and Wealth

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“…These changing social foundations are hinted at in an interesting article by Bhattacharyya and Williamson (2009), who make the argument that Australia has been spared the effects of the Dutch Disease during those periods where the terms of trade spiked À such as the early 1920s, the early 50s with the Korean War and the current period À have been marked by compensatory government consumption and expenditure. Except they note that in the current period the fiscal policy 'coincides with a drop in aggregate government investment.…”

Section: The Rise Of the Local Regulatory State Politicsmentioning

confidence: 94%

“…This was associated with close military and political links with the United States and the conservative political dominance of the Menzies government. Yet this political configuration was also underpinned by both a strong labour movement and an industrial manufacturing sector and, as noted by Bhattacharyya and Williamson (2009), represented a period of expansion of Commonwealth fiscal spending. Of relevance to our broader argument is that these patterns of fiscal compensation were not simply technical fixes but were shaped by the interaction between the international political economy and the political and social institutions that underpinned domestic social compromises.…”

Section: Commodity Prices and Economic Boomsmentioning

confidence: 97%

State transformation and resource politics: Australia and the regional political economy

Jayasuriya¹,

Cannon²

2015

The Pacific Review

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The fundamental research question we seek to answer is this: why has this resource boom, say in contrast with the Korean War and post Second World War booms, not produced long-term political and policy reforms to accommodate the distribution and uneven impact which are the inevitable consequences of the rise in commodity prices? In answering this question, the argument we advance is that the political and policy responses to the current boom must be located in the context of shifts in power and interests in the domestic political economy and in the broader regionalisation of the political economy that have entrenched new transnational and regional forms of capital. An important dimension of this state transformation is the transformation of subnational state institutions and the emergence of what we call the local regulatory state À and its reflection in the territorial politics between resource-rich Australian states and the Federal government. The recent boom in Australia has seen some subnational states engage in activities that have been, until recently, the preserve of the Federal government, namely a complex of diplomacy and international trade. These recent moves have gone well beyond the past symbolic state/federal tensions based on party politics and the creation of sister cities. The Australian case À a resource boom in a developed country with welldeveloped and capable institutions À provides us with an analytical framework to move beyond the resource curse arguments.

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“…Over the post-war years until the early 1980s, industry was largely protected by tariffs (Bhattacharyya & Williamson, 2011). Australian gross domestic product experienced a steady and healthy growth, faster than in the US or the UK, and with far lower levels of unemployment and poverty (Bolton, 1986).…”

Section: The Transformation Of the Australian Middle Classmentioning

confidence: 98%

Globalization and Social Transformation in the Asia-Pacific

Tazreiter¹,

Tham²

2013

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Critical Studies of the Asia Pacific showcases new research and scholarship on what is arguably the most important region in the world in the twenty-first century. The rise of China and the continuing strategic importance of this dynamic economic area to the United States mean that the Asia Pacific will remain crucially important to policymakers and scholars alike. The unifying theme of the series is a desire to publish the best theoretically-informed, original research on the region. Titles in the series cover the politics, economics and security of the region, as well as focussing on its institutional processes, individual countries, issues and leaders.

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Commodity Price Shocks and the Australian Economy since Federation

Cited by 27 publications

References 30 publications

Distributional Consequences of Commodity Price Shocks:Australia Over A Century

Distributional Consequences of Commodity Price Shocks:Australia Over A Century

State transformation and resource politics: Australia and the regional political economy

Globalization and Social Transformation in the Asia-Pacific

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