Abstract
As a result of Australia’s boom in exports of minerals to China and Asian economies, its currency has risen substantially against other leading currencies. The higher exchange rate has posed significant problems for traditional export and import competing industries, one of which is tourism. Computable general equilibrium modelling of the impacts of the mining boom on tourism confirms the Dutch Disease effect. The discussion highlights how recent changes in Australian inbound, outbound and domestic tourism can be explained from the perspective of Dutch Disease. Four different policy responses are then discussed, such as improving Australia’s competitiveness. The discussion has implications for destinations worldwide that are experiencing export booms in commodities other than tourism.
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