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Abstract
Australia is experiencing its largest mining boom for more than a century and a half.
This paper explores, from a national perspective, important economic differences that
arise when a mining boom, such as the current one, is generated by sustained export
price increases (trading gains) rather than export volume increases. Since 2003, the
terms of trade changes – through their direct trading gain effect and indirect real GDP
effects – have increased Australian living standards. The increase, measured from official
data and relative to the United States, is about 25 per cent; an increase that probably
places Australian living standards well above those of the United States. But
official data inadequately adjusts for foreign ownership of mining resources suggesting
that this estimate is probably a little too high.