Australia: Selected Issues

November 8, 2004

Summary

This Selected Issues paper for Australia highlights the dynamics of the Australian real exchange rate and its impact on Australia’s trade. The main findings are that the Australian real exchange rate is largely driven by world commodity prices and that it adjusts relatively rapidly to large shocks, with an estimated half-life of 16 months. The real exchange rate is a significant determinant of Australian imports, with an elasticity of one, but does not appear to have a significant impact on Australian exports.

Subject: Foreign exchange, Inflation, International trade, Labor, Labor market reforms, Prices, Production, Real exchange rates, Total factor productivity, Trade liberalization

Keywords: Australia and New Zealand, commodity, CR, disability, disability scheme, exchange rate, Global, Inflation, ISCR, Labor market reforms, product market reform, real exchange rate, Real exchange rates, Total factor productivity, trade, trade liberalization, Trade liberalization, world commodity price

Pages:
52
Volume:
2004
DOI:
https://doi.org/10.5089/9781451802061.002
Issue:
354
Series:
Country Report No. 2004/354
Stock No:
1AUSEA0022004
ISBN:
9781451802061
ISSN:
1934-7685

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