A Cross-Country Analysis of Export Prices in OECD Countries

As is the case with most small open economies, changes in Australia’s export prices are an important source of national macroeconomic disturbance largely out of its control given its choice of export bundle. This paper distinguishes the extent to which export price variation consists of global versus country-specific changes for the set of 14 OECD countries investigated. We find that sharp changes in global export prices are evidently becoming more important for many of the countries in the OECD sample over the last 25 years as compared with the previous 25 year period. The paper also finds that, by a number of different measures, whilst Australia’s export price growth has apparently become more highly associated with World export prices in recent years, it nonetheless continues to have one of the more volatile set of export prices among OECD countries.