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Australian Growth: A California Perspective

32 Pages Posted: 6 Aug 2001  

Ian W. McLean

University of Adelaide - Centre for International Economic Studies (CIES)

Alan M. Taylor

University of California, Davis - Department of Economics; University of Virginia - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: August 2001

Abstract

Examination of special cases assists understanding of the mechanics of long-run economic growth more generally. Australia and California are two economies having the rare distinction of achieving 150 years of sustained high and rising living standards for rapidly expanding populations. They are suitable comparators since in some respects they are quite similar, especially in their initial conditions in the mid-nineteenth century, their legal and cultural inheritances, and with respect to some long-term performance indicators. However, their growth trajectories have differed markedly in some sub-periods, and over the longer term with respect to the growth in the size of their economies. Most important, the comparison of an economy that remained a region in a much larger national economy with one that evolved into an independent political unit helps identify the role of several key policies. California had no independent monetary policy, or exchange rate, or controls over immigration or capital movements, or trade policy. Australia did, and after 1900 pursued an increasingly interventionist and inward-oriented development strategy until the 1970s. What difference did this make to long-run growth? And what other factors, exogenous and endogenous, account for the differences that have emerged between two economies that shared such similar initial conditions?

Suggested Citation

McLean, Ian W. and Taylor, Alan M., Australian Growth: A California Perspective (August 2001). NBER Working Paper No. w8408. Available at SSRN: https://ssrn.com/abstract=278759

Ian W. McLean (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA5005
Australia
(08) 8303 5231 (Phone)
(08) 8232 5307 (Fax)

Alan M. Taylor

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-1572 (Phone)
530-752-9382 (Fax)

HOME PAGE: http://www.econ.ucdavis.edu/faculty/amtaylor/

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States
(434)-924-3177 (Phone)
(434)-982-2904 (Fax)

HOME PAGE: http://people.virginia.edu/~amt7u

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://nber.org

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

HOME PAGE: http://cepr.org

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