Australia vs. California

Michael Perelman michael at ecst.csuchico.edu
Mon Aug 6 13:46:35 PDT 2001


Wow. California is probably far more state dependent than Australia. I wonder what the population of California would be without state build irrigation systems? In more recent times, California enjoyed the Cold War fruits of defense spending. The universities were subsidizing industry from the late 19th C. ....

Doug Henwood wrote:


> [speaking of Australia...]
>
> <http://papers.nber.org/papers/W8408>
>
> Australian Growth: A California Perspective
> Ian W. McLean, Alan M. Taylor
>
> NBER Working Paper No. W8408
> Issued in 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?

--

Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu



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