balance of payment essay
...uctivity and deprecation in the exchange rate. All these factors lead to falling unit labour costs Higher inflation, higher wage growth, lower productivity and appreciation in the exchange rate reduce international competitiveness. All these factors subsequently lead to rising unit labour costs. Structural Change Structural change refers to the change in the relative importance of the various types of production in the economy. Structural change occurs when one group of industries grows at a different rate to other industry groups. Australia has become a post-industrial economy. Spending on services has been rising at a faster rate than spending on goods since at least the start of the 1960’s. Our society is changing its preferences. Australia has experienced significant changes in the composition of its production by sector, ie. structural change. In general: - The tertiary and mining sectors have experienced favourable structural change - Manufacturing, farming, etc have experienced adverse structural change. What causes structural change? Structural change can be seen as coming from two mai...