Another way of thinking about this is that in the earlier period there was an increase in the rate of time discount and correspondingly an increase in the normal level of interest rates.
Although the high terms of trade are still boosting aggregate demand, the aftermath of the credit boom and the gradual realisation that this experience is unlikely to be repeated is  4  See Stevens G (2011), “On the Use of Forecasts”, Address to Australian Business Economists Annual Dinner, Sydney, 24 November.