Two strikes from recession, not three

The recent slip in our terms of trade is a blip on the back of a mighty, his­toric rise. The chart shows the record to Decem­ber 2008 (source here).

There’s cer­tain­ly some more soft­en­ing to come when the data for 2009 becomes avail­able. But if there’s one thing that is work­ing to our advan­tage in the cur­rent inter­na­tion­al slump it’s the his­toric lev­el of our terms of trade. Aus­trali­a’s export dol­lar con­tin­ues to com­mand a more imports it has in your life­time or mine.

The Busi­ness Spec­ta­tor inter­view is also notable for an admis­sion that the Rudd cab­i­net sim­ply ‘made up’ the bud­get for the Nation­al Broad­band Net­work (NBN). It’s depress­ing to learn that pol­i­cy-based evi­dence is still a fea­ture of infra­struc­ture planning.

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