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Tariff-Growth Nexus in the Australian Economy, 1870-2002: Is there a Paradox?

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  • Prema-Chandra Athukorala

    ()

  • Satish Chand

    ()

Abstract

This paper investigates the relationship between tariff and growth in the Australian economy over the period from 1871 to 2002. The study is motivated by the debate on the apparent 'tariff-growth paradox', a sign switch in the link between tariff rate and growth between the first and second episodes of globalization in world history, established from cross-country growth regressions. The long annual time series together with the recent developments in time series econometrics allows us to establish an unambiguous and stable negative relationship between tariff rates and economic growth. It is of course not possible to generalize from a single country case, but our results do cast significant doubts on the 'tariff-growth paradox' reported in recent cross-country studies.

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File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2007/wp-econ-2007-08.pdf
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Bibliographic Info

Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2007-08.

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Length: 33 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:pas:papers:2007-08

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Keywords: economic growth; tariff; Australia;

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  1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, December.
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Cited by:
  1. Cassette, Aurélie & Farvaque, Etienne, 2009. "Australian and American tariffs policies: do they rock or tango?," MPRA Paper 13627, University Library of Munich, Germany, revised 25 Feb 2009.

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