Integrated Macro-Micro-Modelling Under Rational Expectations: With an Application to Tariff Reform in Australia ; with 35 Tables
Springer Science & Business Media, Feb 17, 2000 - Business & Economics - 279 pages
This monograph is concerned with the formulation and implementation of ORANI-INT, an intertemporal Computable General Equilibrium (CGE) model of the Australian economy. The aim is to bring together, in a balanced approach, theory and data for the purpose of developing a practical state-of-the-art tool for policy analysis. The modelling approach adopted is motivated by the recent trend in economy-wide modelling to combine the respective strengths of traditional CGE models and modern macroeconomic models. Traditional CGE models typically provide a dissagregate representation of the economy at a single point in time. Such models are useful for analysing issues involving the allocation of resources among the various agents identified at a particular point in time. Modern macroeconomic models, on the other hand, usually provide an aggregate representation of the economy over many points in time. Such models are useful for analysing issues involving the allocation of resources across time. A model that combines the strengths of static CGE models and modern macro-dynamic models is amenable to addressing a wide range of policy issues. To demonstrate this point ORANI-INT is used to analyse tariff reform.
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29 Figure adjustment costs aggregate investment Aj,t algorithm approximation error assumed behaviour benchmark experiment CBG scenario cent chapter composite commodity computational Construction sector control path control scenario cost of capital deflator demand derived differential form Divisia indexes domestic and foreign economy economy's endogenous equation system Euler Euler's method exchange rate exogenous variables exports fall foreign liabilities forward-looking full intertemporal experiment function GDP deflator gestation lag government expenditure growth households Housing sector ic,e implemented imported Manufacturing commodity indirect taxes inputs intertemporal base solution intertemporal CGE model investors ISBN Laspeyres indexes maximise Newton-Raphson method nominal nonnegativity constraints optimisation problem ORANI ORANI-13 database ORANI-INT output Paasche indexes parameters percentage change period price of capital production rates of return rational expectations real consumption real GDP relative rental price sectoral capital stocks sectoral investment sectoral rates shock Simulation Projections slack variables specification static tariff cut trade yeart