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An Australian Contribution to International Trade Theory: The Dependent Economy Model
Author(s) -
Metaxas Phillip Edmund,
Weber Ernst Juerg
Publication year - 2016
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.12264
Subject(s) - balance of payments , economics , scope (computer science) , public servant , context (archaeology) , balance (ability) , identification (biology) , payment , macroeconomics , neoclassical economics , economy , law , political science , finance , medicine , paleontology , botany , biology , computer science , physical medicine and rehabilitation , programming language
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.