Housing assets are central both to household finances and the strength. Photo: James Alcock

The path the Australian economy takes in 2014 will be lit by two prices.

One is the dollar, the other is house values.

If neither heads in the right direction, 2014 could prove more disappointing than 2013, a year of below-normal job growth and rising unemployment.

But that's what typically follows below-normal growth in economic output, which in turn typically follows a peak in export commodity prices.

And commodity prices peaked in mid-2011. In fact, the economy has been lucky to escape the inevitable recession.

But it's not too late for things to go pear-shaped.

The Australian dollar and the housing market could combine to make sure the historical pattern is repeated.

Here's how. The economy that's already growing at about two thirds its normal pace, and staring down the barrel of slower growth as the mining investment boom winds down, needs two things to help it kick the mining investment habit.

One is a lower exchange rate. That would give exporters relief from intense competitive pressures. And it would give domestically focused industry a bigger slice of the spending done by Australians.

The other is for the housing market to stay strong.

It is a key economic signal, encouraging investment by reducing fears that profits will be undermined by capital losses.

The high-employment building industry is enmeshed with many other sectors with big spillover effects throughout the economy.

And housing assets are central both to household finances and the strength - and therefore the capacity to lend - of the banks.

The Reserve Bank has made it clear it wants prices to remain strong. But what if the dollar and the housing market don't follow the script?

It's easy to imagine another bout of strength in the exchange rate, perhaps if expected interest rate rises in the US are delayed.

Or if Europe's economic recovery falters and stokes more of the demand for Australian bonds that has buoyed the Aussie in the past year or two.

And it's easy to imagine a dip in housing prices, prompted by investor fatigue, sluggish jobs and wages growth and pressure from a strong Aussie dollar.

Speculation about an eventual rate rise from the Reserve Bank will not help. The notorious fickleness of investors now dominating the market could turn a price retreat into a rout if they turn tail en masse.

A price slump would undercut consumer spending and curtail bank lending, not just to households but to businesses.

Add a too-high exchange rate and slumping housing market to the withering mining investment boom and you have a recipe for recession.

Of course, it's not normal for just about every important thing to go wrong at once. But it does happen.