Working Paper: NBER ID: w12160
Authors: Douglas A. Irwin
Abstract: In 1901, six Australian states joined together in political and economic union, creating an internal free trade area and adopting a common external tariff. This paper investigates the impact of federation on Australia's internal and international trade flows by studying changes in the "border effect" over this time. This is possible because Australian states reported intra-Australian trade prior to 1901 and for eight years after federation. The results indicate that federation itself produced little change in Australia's trade patterns, but that the border effect increased substantially between 1906 and 1909 when the protectionist Lyne Tariff was imposed.
Keywords: trade flows; federation; Australia; border effect; tariffs
JEL Codes: F1; N7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| federation (F53) | trade patterns (F10) |
| imposition of tariffs (F13) | trade flows (F10) |
| federation (F53) | border effect (F55) |
| imposition of tariffs (F13) | border effect (F55) |
| federation (F53) | trade flows (F10) |