An Australian Contribution to International Trade Theory: The Dependent Economy Model

34 Pages Posted: 8 Sep 2016

See all articles by Phillip Edmund Metaxas

Phillip Edmund Metaxas

The University of Western Australia - Department of Economics

Ernst Juerg Weber

The University of Western Australia - UWA Business School

Date Written: September 2016

Abstract

The dependent economy model is also known as the ‘Australian model’ and the ‘Salter–Swan–Corden–Dornbusch model’ but neither title adequately conveys the scope and sequence of contributions that were instrumental to its development. In this paper attention is given to indispensable contributions made by the Australian public servant Roland Wilson and the British economist James Meade. The model's development is placed in the broader context of the evolution of balance of payments theory, and the paper highlights a vital Australian contribution to international trade theory, namely, the identification of the real exchange rate as the critical relative price in balance of payments adjustment.

Suggested Citation

Metaxas, Phillip Edmund and Weber, Ernst Juerg, An Australian Contribution to International Trade Theory: The Dependent Economy Model (September 2016). Economic Record, Vol. 92, Issue 298, pp. 464-497, 2016, Available at SSRN: https://ssrn.com/abstract=2836243 or http://dx.doi.org/10.1111/1475-4932.12264

Phillip Edmund Metaxas (Contact Author)

The University of Western Australia - Department of Economics

35 Stirling Highway
Crawley, Western Australia 6009
Australia

Ernst Juerg Weber

The University of Western Australia - UWA Business School ( email )

Crawley, Western Australia 6009
Australia

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