Export-Led Growth and Dutch Disease: A Case Study of Australia and its Regions

Abstract

The Australian economy has enjoyed several mining booms over the past few decades. As an export-orientated economy, Australia has experienced several mining booms since the 1960s, including one in the early 1980s and, most notably, the unprecedented boom of the 2000s. This latest mining boom began in the early 2000 when the demand for natural resources such as coal and iron ore soared in response to increasing demand in Asia, particularly China. This unprecedented demand has contributed to Australia’s robust economic performance over the past decade, especially during the Global Financial Crisis. However, the 2000s boom may have also had some detrimental effects on other tradable sectors of the Australian economy, such as agriculture and manufacturing. Moreover, from a regional (intra-country) perspective, the economic benefits and costs of the mining boom are not identically distributed across the country. While only certain regions benefited from the growth in minerals and resources exports, the cost of the mining boom appear to be much more widespread.