The Dutch disease in Australia : policy options for a three-speed economy / W. Max Corden
- Bib ID:
- 5977189
- Format:
- Book
- Author:
- Corden, W. M. (Warner Max), 1927-
- Online Version:
- Online version
Broken link? let us search Trove , the Wayback Machine , or Google for you.
- Description:
-
- [Parkville, Vic.] : Melbourne Institute of Applied Economic and Social Research, University of Melbourne, 2012
- 27 p. ; 21 cm.
- ISBN:
- 9780734042651
- Series:
- Melbourne Institute working paper ; no. 12/05 1328-4991
- Summary:
-
This paper expounds the concept of Dutch Disease as it applies currently to Australia, noting the various gains and losses resulting from the Australian mining boom. "Dutch Disease" refers to the adverse effects through real exchange rate appreciation that such a boom can have on various export and import-competing industries. Particular firms or industries may be both gainers and losers. The distinction is made between the Booming Sector (mining), the Lagging Sector (exports not part of the Booming Sector, and import-competing goods and services), and the Non-tradable Sector. The main discussion focuses on policy options, given a floating exchange rate regime. What should the government do - if anything - to reduce or avoid this Dutch "disease"? The principal options are: Do nothing, piecemeal protectionism, and run a fiscal surplus, combined with lowering the interest rate and possibly establishing a Sovereign Wealth Fund. Piecemeal protectionism is likely to be politically popular but there are strong arguments against it. The costs of any measures that successfully moderate real appreciation of the exchange rate and thus Dutch Disease effects are noted, and may be considerable. This is "exchange rate protection". Gains to some industries are likely to be balanced by losses to others. It is shown, surprisingly, that a fiscal surplus that is financed by taxation of the profits of the Booming Sector may ot significantly moderate real appreciation. The reason is that this sector is to a significant extent foreign owned. An issue is whether firms and industries can be clearly divided into those that belong to the Non-tradable Sector and those that belong to the Lagging Sector, the latter being the losers from Dutch Disease. If such a clear distinction cannot usually be made, then the case for "doing nothing" is strengthened.
- Notes:
-
- "February 2012".
- Includes bibliographical references (p. 26-27)
- Also available online. Address as at 29/05/2012: http://www.melbourneinstitute.com/downloads/working_paper_series/wp2012n05.pdf
- Subject:
- Other authors/contributors:
- Melbourne Institute of Applied Economic and Social Research
- Copyright:
-
In Copyright
You may copy under some circumstances, for example you may copy a portion for research or study. Order a copy through Copies Direct to the extent allowed under fair dealing. Contact us for further information about copying.
Copyright status was determined using the following information:
- Material type:
- Literary Dramatic Musical
- Published status:
- Published
- Publication date:
- 2012
Copyright status may not be correct if data in the record is incomplete or inaccurate. Other access conditions may also apply. For more information please see: Copyright in library collections.
Request this item
Request this item to view in the Library’s reading room.
Feedback
Similar items
- Australia's mining boom / edited by Justin Healey
- The structure of the Western Australian economy
- Passing on prosperity [electronic resource] : raising the high bar of reform / Business Council of Australia
- Structure of the Western Australian economy
- The Australian economy : your guide / Philip Lewis ... [et al.]