http://au.news.yahoo.com/latest/a/-/latest/9273848/us-shocks-no-longer-australia...

It used to be said that if the United States sneezed, the Australian economy caught the flu. But no more.

An analysis by the International Monetary Fund (IMF) has found that in the past 10 years, economic shocks in the US no longer have a significant impact on Australia. But Asia does.

In a separate article on Australia and New Zealand in its Regional Outlook for the Asia Pacific released in Hong Kong on Thursday, the IMF said economic shocks from the emerging economies of Asia have overtaken the US as the most important external factor influencing Australian business.

Using a sample period from 1991 to 2010, it found a one per cent shock to US gross domestic product (GDP) led to a move of about 0.4 per cent in Australian growth.

In contrast, GDP shocks from emerging Asian economies had an almost negligible impact on Australia.

However, the result for the shorter sample period of 2000-2010 was dramatically different, with a one per cent shock in emerging Asia producing a shift in Australian growth of 0.33 per cent.

"The impact of US GDP shocks on Australia is no longer statistically significant," the report says.

As such, the long-term trend of continued strong growth in emerging Asia bodes well for Australia.

"Should emerging Asia continue to grow notably faster than the world average, the impact on Australia will be even larger than in the past," the IMF's modelling found.

"This larger impact reflects both the increase in emerging Asia's economic size and Australia's growing integration with emerging Asia."

Over the next 10 years, the analysis suggests that a 50 per cent increase in emerging Asia's GDP, driven by tradeable sector productivity growth, would raise the Australian GDP by about 20 per cent.
"However, should emerging Asia's economic growth become more balanced, with productivity growth in both tradeable and non-tradeable sectors contributing equally, the growth dividend is roughly about half, owing to more modest improvements in the terms of trade of Australia," it says.

Maqqa wrote on Apr 28^th, 2011 at 4:37pm:


Get a grip
All economists agree that it was the stimulis spending that allowed us to ride it out as we did.
Kudos to Costello for the surplus that allowed us to do it.

We can be thankfull for Keatings vision, for Costellos good managment and Swanns courage in saving this country from the global economic meltdown.
If we had taken up Abbott's policies we would be in such an economic hole it would take decades to dig us out

Thanks Mr Keating.

Maqqa wrote on Apr 28^th, 2011 at 4:37pm:

Primary Industry concentrates wealth!!!!

Economics isn't trivia. You can't read about it on the back of a weetbix packet and pretend you understand it because the economy is a complex system!!!

The Liberal Opposition swore black and blue that the surplus must be preserved at all costs and went against the sameTreasury officials that advised Keating, Costello and Swann and instead fought for the same
policies that actually turned the 1930's recession into the Great Depression!

Yep..The Liberal Opposition were wrong again 

adelcrow wrote on Apr 28^th, 2011 at 5:32pm:




dont recall that at all. crowy got a link?


I think if the Libs had been in they would have used the surplus as well...

this to me doesnt really worry me about the money or the surplus its what we have to show for it.. that counts..

debt anyone would expect to have..but our debt is growing daily.. and what do we have to show for it??.. is it [the borrowings] now helping to pay for the stimulus that they are afraid to stop?

more detention centres I guess..like I said we couldnt even help QLD we have to have a levy to fix the floods..amazing!

astro_surf wrote on Apr 28^th, 2011 at 9:20pm:



That's it?