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Australian growth: a California perspective

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  • Ian W. McLean
  • Alan M. Taylor

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-19th century, their legal and cultural inheritances, and with respect to some long-term performance indicators. However, their growth trajectories have differed markedly in some subperiods 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?

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Bibliographic Info

Paper provided by Federal Reserve Bank of San Francisco in its series Pacific Basin Working Paper Series with number 2001-06.

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Date of creation: 2001
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Handle: RePEc:fip:fedfpb:2001-06

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Keywords: Australia ; Economic development ; California ; Geography;

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Citations

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Cited by:
  1. Ian W. McLean, 2004. "Australian Economic Growth in Historical Perspective," School of Economics Working Papers 2004-01, University of Adelaide, School of Economics.
  2. Alan M. Taylor, 2002. "Globalization, Trade, and Development: Some Lessons From History," NBER Working Papers 9326, National Bureau of Economic Research, Inc.
  3. World Bank, 2005. "Kazakhstan : Country Economic Memorandum, Getting Competitive, Staying Competitive, The Challenge of Managing Kazakhstan's Oil Boom," World Bank Other Operational Studies 8656, The World Bank.
  4. Ian W. McLean, 2005. "Why Was Australia So Rich?," School of Economics Working Papers 2005-11, University of Adelaide, School of Economics.
  5. J.C. Herbert Emery & Ronald D. Kneebone, 2008. "Socialists, Populists, Resources, and the Divergent Development of Alberta and Saskatchewan," Canadian Public Policy, University of Toronto Press, vol. 34(4), pages 419-440, December.
  6. Sergey Sinelnikov & Pavel Kadochnikov & Ilya Trunin, 2008. "From Elections to Appointments of the Regional Governors: Major Challenges and Outcomes," Published Papers 2, Gaidar Institute for Economic Policy, revised 2008.
  7. Graeme Davis & Robert Ewing, 2005. "Why has Australia Done Better than New Zealand? Good Luck or Good Management?," Treasury Working Papers 2005-01, Treasury, Australian Government, revised Jan 2005.

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