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The Impact of Federation on Australia's Trade Flows

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  • DOUGLAS A. IRWIN

Abstract

In 1901, six Australian states joined together in political and economic union, creating an internal free trade area and adopting a common external tariff. This paper investigates the impact of federation on Australia's internal and international trade flows by studying changes in the 'border effect' over this time. This is possible because Australian states reported intra-Australian trade prior to 1901 and for 8 years after federation. The results indicate that federation itself produced little change in Australia's trade patterns, but that the border effect increased substantially between 1906 and 1909 when the protectionist Lyne Tariff was imposed. Copyright © 2006 The Economic Society of Australia.

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Bibliographic Info

Article provided by The Economic Society of Australia in its journal Economic Record.

Volume (Year): 82 (2006)
Issue (Month): 258 (09)
Pages: 315-324

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Handle: RePEc:bla:ecorec:v:82:y:2006:i:258:p:315-324

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  1. Feenstra, Robert C, 2002. "Border Effects and the Gravity Equation: Consistent Methods for Estimation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 491-506, December.
  2. Cashin, Paul A, 1995. "Real GDP in the Seven Colonies of Australasia: 1861-1991," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(1), pages 19-39, March.
  3. Peter J. Lloyd & Donald Maclaren, 2004. "Gains and Losses from Regional Trading Agreements: A Survey," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 445-467, December.
  4. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
  5. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  6. Richard Pomfret, 2005. "Regional Trade Agreements," School of Economics Working Papers 2005-15, University of Adelaide, School of Economics.
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