Australia, Canada, and the International Economy in the Era of Postwar Reconstruction, 1945–50

Early hopes that a multilateral economy could be speedily restored after World War II were shattered by the sterling crisis of 1947. In the ensuing retreat to bilateralism, Canada acted vigorously to strengthen economic links with the Americans, and in the late 1940s its export dependence on the United States increased dramatically. The Australian response to the crisis was to tighten trading and financial connections with Britain and the rest of the sterling area. The limitations of UK supply capacity, however, eventually encouraged a reversal of policy after the fall of the Labor government, and Australia turned to the dollar area to tap additional resources for accelerated economic development.     

Trade Costs,Trade Balances and Current Accounts: An Application of Gravity to Multilateral Trade

In this paper we test the well-known hypothesis of Obstfeld and Rogoff (NBER Macroeconomics Annual 7777:339–390, 2000) that trade costs are the key to explaining the so-called Feldstein–Horioka puzzle. Our approach has a number of novel features. First, we focus on the interrelationship between trade costs, the trade account and the Feldstein–Horioka puzzle. Second, we use the gravity model to estimate the effect of trade costs on bilateral trade and, third, we show how bilateral trade can be used to draw inferences about desired trade balances and desired intertemporal trade. Our econometric results provide strong support for the Obstfeld and Rogoff hypothesis and we are also able to reconcile our results with the so-called home bias puzzle.

世贸组织和多边贸易体系:现存的问题和未来的构架

多边贸易体系正处在十字路口 世界贸易组织和多边贸易体系正处于十字路口.世界贸易组织在多哈会议前以及多哈会议上所做出的决定都将对这个贸易体系未来的走势产生重要的影响.     

Migrants and Technological Transfer: Chinese Farming in Australia, 1850–1920

Chinese farming in Australia between 1850 and 1920 has generally been given little attention, being usu ally characterised as just market gardening, but with little other detail about its development and characteristics. This article argues that Chinese farming was both complex and dynamic. Initially, Chinese farming was primarily casual labouring along European lines. However, from the 1880s onwards, Chinese farming became more specialised, focusing on a wide range of high-value, labour-intensive crops. The skill of the Chinese was not just the transference of farming techniques from China, but also in their entrepreneurship and ability to adapt their techniques to the Australian environment. Despite widespread European racism, some Europeans sought to capture the benefits of Chinese farming, developing European–Chinese partnerships. After 1900, Chinese farming declined in scale and diversity. At the same time, Europeans influenced by Chinese success adopted more labour-intensive farming practices.     

Imperial Self-Insufficiency Rediscovered: Britain and Australia 1945–51

This paper addresses the unresolved debate about the timing of economic disengagement between Australia and Great Britain. During Chifley's administration international economic collaboration between Australia and Britain was close, Australia tending to identify its interests with those of the UK and the sterling area. Yet collaboration never stretched to acceptance by Australia of traditional forms of manufacturer–primary producer complementarity; this played no part in Canberra's postwar planning and priority given to industrialization led to the relative neglect of rural industries, which, together with the rapidly growing demands of its own population, reduced export surpluses and contributed to Australia's poor record as a food supplier. Buoyant export prices, especially for wool, combined with capital inflows from the UK to stimulate import demands. Because of dollar shortages most of these had to be sourced from Britain. From 1948 the UK not only expanded exports dramatically but was a major source of migrants and capital. Yet British industrial capacity in particular proved unequal to the task of meeting Australian needs. Imperial self-insufficiency again stood revealed, encouraging Menzies to look beyond the sterling area to support Australia's rapid development.     

Capital Markets and Capital Formation in Australia, 1945–1990

This survey article continues the author's examination of the interaction between domestic capital markets and capital formation by studying the 45 years after the end of World War II. (Part 1 appeared in AEHR 37 (3) 1997.) The significant rise and the sustained increase in the ratio of gross domestic capital formation to gross domestic product (GDP) posed challenges to local deposit taking institutions and capital markets to mobilize savings. The changing balance between public and private investment, and between investment by businesses and households, was reflected in the relative importance of government and private debt, and equity. The capital markets and financial institutions proved themselves to be adaptable enough to finance more than 90 per cent of postwar capital formation. However, the increasing inward and outward flows of foreign direct investment have weakened the nexus between the supply of domestic savings and capital formation.     

Real Wages in Australia and Canada, 1870–1913: Globalization versus Productivity

Australia's and Canada's real wage experiences between 1870 and 1913 were distinctive. Faster productivity growth underpinned Canada's overtaking of Australia's wage levels. The globalization forces of migration and trade also shaped their comparative wages, principally by reducing wage growth in Canada. Immigration increased slightly Australia's real wages, but reduced wage levels in Canada, and tempered there the beneficial effects of rising productivity and improving terms of trade. In contrast, wage earners' share of national income rose after 1890 in Australia, with the productivity slowdown hitting chiefly rents and profits. Distributional shifts favouring wage earners in Australia, and the depressing effects of mass immigration on wages in Canada, limited Canada's wage lead before 1914, despite her faster productivity growth.