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Tariffs, Subsidies, And Profits: A Re‐Assessment Of Structural Change In Australia 1901–39

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  • David Merrett
  • Simon Ville

Abstract

We re‐interpret the drivers of structural change in Australia from Federation to World War II. Manufacturing increased its relative share of output and employment, the farm sector and mining contracted. Conventional wisdom contends these shifts largely resulted from government policy, particularly increases in trade barriers. We contend that the connection between tariffs and increased profitability is conceptually weak and not supported by extant evidence. We argue that exogenous shifts in consumer preferences, the adoption of new technologies, changing factor proportions, and greater specialisation in manufacturing and services were responsible for manufacturing increasing its share of the economy's resources and output.

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  • David Merrett & Simon Ville, 2011. "Tariffs, Subsidies, And Profits: A Re‐Assessment Of Structural Change In Australia 1901–39," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 51(1), pages 46-70, March.
    • Handle: RePEc:bla:ozechr:v:51:y:2011:i:1:p:46-70
    DOI: 10.1111/j.1467-8446.2011.00324.x
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    Cited by:

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    2. Bengtsson, Erik & Waldenström, Daniel, 2018. "Capital Shares and Income Inequality: Evidence from the Long Run," The Journal of Economic History, Cambridge University Press, vol. 78(3), pages 712-743, September.

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