this is all out of dixon pg94, i think itswat ur after and i hope it helps
*constarints on fute eco. growth- in the longer term the cad. acts as a speed limit on eco. growth. higher levels of eco. growth generally involve an increase in imports and a deterioration in the cad. economies with a cad problem are therefore forced to limit growth to the level at which the cad is sustainable, this is known as the bop....
.... because over a period of time, sustaining a high CAD has significant impacts on the aust. economy and on the conduct of eco. policy. economists differ over the extent to which we should be concerned over aust. cad and foreign liabilties, with some arguing that since the gov. is not contibuting to the cad and forign liabilties problems, any external imbalances are simply the result of normal market transactions in the global economy. some argue athat a cad and foreign debt can be benificial because borrowing from overseas can increase investment and dhelp the economy grow faster.
risks associated with high cad
*the growth of foriegn liabilties-lenders maybe reluctant to lend to aust. or invest here
*increase servicing costs- contibute to the debt trap, aust. borrows money to service debt then borrows more to service that debt ect.
*increased volatility for exchange rates- reduced demand for aust $ means depreciation in a$