Australian Economic Growth in Historical Perspective: A Survey for the Economic Record, School of Economics Working Paper 2004-01, University of Adelaide, May 2004
Combines traditional interpretations and insights from recent growth analysis. Extensive bibliography.
Australia’s (modern) economy was formed as part of the first globalisation, dating from the 1820s. Further, it was a settler economy – or European offshoot – where growth was at first primarily extensive in nature. As the natural resource base was discovered, the complementary factors of labour and capital were attracted in significant (if volatile) flows. The institutional framework for the economy was also imported, then adapted to local conditions, and proved to be predominantly growth enhancing. And the spatial pattern of development was heavily constrained by key features of the natural environment, including the location of fertile land, mineral deposits, and water supplies. The essential driver of this development was, at first, international demand for wool, gold, and other agricultural and mineral products. The combination of resource abundance (per capita) and strong foreign demand encouraged specialisation in production and ensured international competitiveness and hence high levels of productivity. This underpinned extraordinarily high per capita incomes from a very early stage. (p. 20)