This paper models both the supply and demand of Australian non-commodity exports. We derive long-run export demand relationships from first principles. On the demand side, the paper finds a relatively low substitution elasticity between Australian exports and a broad basket of foreign produced...

To meet the needs of a broad set of internal and external stakeholders now and into the future the Australian Treasury maintains a significant macroeconomic modelling capability. Treasury's current inhouse capability is similar to that of the US Congressional Budget Office (CBO) and the Joint...

We derive a conditional long run labour demand equation via a representative firm level profit maximising problem, where production takes place according to a constant elasticity of substitution (CES) production function. This theoretical framework is augmented by cyclical explanatory variables...

This paper develops a framework for projecting the GDP growth of Australia’s trading partners from 2012 to 2050. The framework draws heavily on the existing conditional growth literature, including long-standing estimates of key convergence parameters. It adds to the large amount of research...

This paper explores the sources of fluctuations in sectoral employment growth rates across the Australian economy over three different periods: the pre-terms of trade boom period; the pre-GFC phase of the terms of trade boom; and the GFC and post-GFC phase. We find that common cyclical...

Australia’s terms of trade rose significantly over the eight years to 2011 12 following a period of relative constancy over the preceding 40 years. Australian Government fiscal projections from the 2010 11 Budget to the 2013 14 Budget, assumed that beyond the near term forecast period the...

Treasury’s forecasting framework has evolved over the past 21 years from the outlook for a single financial year to the outlook for the Australian economy 40 years ahead for intergenerational analysis. A constant through this evolution has been the sharp distinction between the methodologies...

In recent years, a series of studies have been undertaken in Australia that use static general equilibrium models with a representative household to compare the relative efficiency of different Australian taxes. This paper aims to complement these earlier studies and contribute to a broader...

This paper adds to the relatively scant Australian literature on modelling the demand and supply of Australian imports. We build on earlier demand modelling by deriving conditional import demand relationships via representative household/firm-level utility-maximisation/cost-minimisation...

For a small open economy, such as Australia, its living standards (per capita income) are determined by the level of its terms of trade, labour productivity, labour force participation and population. Australia’s terms of trade, labour force participation and population growth are expected to...