Fans of the Matrix movies will be familiar with the way in which the lead character, Neo, leans back, seemingly defying gravity, while projectiles fly toward him.
Australia’s economy is much like Neo’s performance. Over the past 26 years, the country has managed to dodge an array of negative shocks from abroad. As a result, the current economic boom is the longest in its own history and, arguably, the longest period of expansion of any developed economy. Quite a feat.
In the movie, it turns out that Neo is capable of this partly because the rules of the game have changed — he is in a computer program, where gravity does not always apply — and he is also uniquely talented. For economists, a big question is whether Australia is also “uniquely talented” or just lucky, having benefited from a world that has changed in its favour.
Of course, it would have been easy for Australia to have grown if the global economy had been stable over this period. This has not been the case.
Australia has had to cope with the Asian financial crisis in 1997-1998, the bursting of the tech bubble in 2000 and the big one: the global financial crisis of 2008-2009. Australia also avoided having a recession at the end of a leverage-fuelled housing price boom in 2002-2003, during a once-in-a-century drought in the early 2000s and at the end of the largest mining boom in its history, which peaked in 2011-2012.