Australia has experienced frequent and large commodity export price shocks similar to commodity exporters in Asia, Africa, and Latin America, but this price volatility has had much more modest impact on economic performance. Why? This paper explores Australian terms of trade volatility since 1901. It identifies two major price shock episodes before the recent mining-led boom and bust. It assesses their relative magnitude, their impact on de-industrialisation and distribution during the booms, and the labour market and policy responses to the shocks. Australia has indeed responded differently to volatile commodity prices than have other commodity exporters.