The application of compositional data analysis methods in economics has some attraction. In particular, this methodology ensures that the stochastic component of budget share models will satisfy the restriction of shares to the unit simplex. The methodology relies upon the use of log-ratios in...

For decades rural Australia has been discriminated against by industrial policies at home and agricultural protectionism abroad. While agricultural export taxation in poor countries had the opposite impact, recent reforms there mean that that offsetting effect on Australia has diminished. There...

The main ideas in this paper are: (a) that CGE models can be used in forecasting; and (b) that forecasts matter for policy analysis. We demonstrate these ideas by describing an application of MONASH, a dynamic CGE model of Australia, to the Australian motor vehicle industry over the period 1987...

In computable general equilibrium (CGE) modeling there are two broad approaches to generating regional results: bottoms-up and tops-down. We describe both, providing illustrative examples from our experience in Australia. We then describe USAGE, a 500-order dynamic CGE model of the US that we...

This document contains two short papers on the theoretical structure of FH-ORANI. The first paper is concerned with local ownership shares for fixed capital in individual industries. The second is concerned with the taxation of earnings of fixed capital. Each paper identifies shortcomings in the...

This paper estimates exchange rate pass-through for Australian manufactured imports by applying an econometric procedure which avoids the pit-falls in previous studies to a carefully assembled data set. For the first time, we provide estimates of pass-through based on the Johansen (1988) ML...

This paper describes the implementation for the MONASH model of a scheme for flexible nesting of production functions. The scheme supports substitution in production between different commodities and between commodities and primary factors, which the standard ORANI production system does not....

We estimate a simultaneous discrete choice model for welfare participation and labour supply of two-adult households in Australia using the Income and Housing Costs Survey of 1994/1995. Welfare participation is assumed to have a positive indirect effect (through income) and a negative direct...

This paper outlines two potential approaches to incorporating business taxation and allowances into a model of a firm to determine the effect of tax policy changes on the firm's behaviour. Following Auerbach, King and Benge, we first develop a model in which the firm maximises the value of its...

This is a companion paper to Impact Preliminary Working Paper No OP-73 in which Rimmer and Powell report on a new implicitly directly additive demand system (AIDADS) which (in Cooper and McLaren's 1992b terminology) is effectively globally regular. In OP-73 AIDADS is fitted to a six-commodity...