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Abstract

Australia has long been considered a commodity based economy, with the relationship between the terms of trade and the real exchange rate well documented. Less well documented are the determinants of the Australian terms of trade and how these have moved in response to structural change and growing internationalisation of the Australian economy. This paper examines the Australian terms of trade since 1983 and links movements with the increasing internationalisation of the Australian economy and structural changes within the export and import sectors.

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