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Chinese resource demand and the natural resource supplier

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Dungey, M and Fry-McKibbin, R and Linehan, V (2013) Chinese resource demand and the natural resource supplier. Discussion Paper. University of Tasmania. (Unpublished)

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Abstract

This paper provides empirical evidence on the effects of Chinese resource demand on the resource rich natural resource supplier using the example of Australia.
A structural VAR model is used to examine the effects of Chinese resource demand, commodity prices and foreign output on the macroeconomy with a formally specified mining and resources exports sector. The key findings of the
paper are that shocks to Chinese demand and commodity prices result in a sustained increase in commodity prices and mining investment and a positive impact on the resources sector. However, these shocks eventually lead to lower real domestic output with factors of production moving out of the non-resources sectors and into the resources sector, resulting in a fall in non-resource sector output which is not fully offset by the rise in resources sector output. The results also indicate some market power by the natural resource supplier.

Item Type: Report (Discussion Paper)
Keywords: repec, China, resource demand, commodity prices, mining investment, resources sector
Publisher: University of Tasmania
Date Deposited: 27 Aug 2013 01:47
Last Modified: 18 Nov 2014 04:54
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