A TALE OF 2 DOMINIONS - COMPARING THE MACROECONOMIC RECORDS OF AUSTRALIA AND CANADA SINCE 1870

This article considers whether the disparate macroeconomic records of Australia and Canada can be explained by their links with Britain and the United States. Using modem time series methods, the authors find i n favour of long-run convergence for Australia and Britain, and catchi ng up for the other comparisons, with faster Canadian growth arising f rom that country's close connections with the United States. Patterns of convergence were interrupted by occasional discontinuities, notably the income collapses in Australia after 1891 and Canada after 1917. B oth social capability and the price effects of factor and commodity fl ows shaped income convergence among the four economies.