FEDERAL: A Two-Region Multisectoral Fiscal Model of the Australian Economy

Madden, John R.

doi:10.1016/s1474-6670(17)47132-1

Cited by 16 publications

(14 citation statements)

References 9 publications

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“…CGE models provide a highly useful and flexible framework to examine the impacts of increased visitor expenditure. They incorporate mechanisms for potential crowding out of one activity by another as well as for input-output multiplier effects (Dixon et al, 1982;McDougall, 1995;Dixon & Parmenter, 1996;Madden, 1996;Adams & Parmenter, 1999).…”

Section: Computable General Equilibrium Modelsmentioning

confidence: 99%

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Economic Impacts of Inbound Tourism under Different Assumptions Regarding the Macroeconomy

Dwyer

Forsyth²,

Madden

et al. 2000

Current Issues in Tourism

161

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On what is taken to be the 'Standard View', increased tourism expenditure from inbound markets has direct, indirect and induced effects on a host destination, leading to increased production, income and employment. Strong links between tourism and other sectors of business reduce import leakages from tourism expenditure thereby enhancing the multiplier effects of the injected expenditure on domestic output, value added and employment. The usual technique for analysing these effects is input-output analysis. This paper argues that economy-wide effects must be taken into account in determining the impacts of increased tourism expenditure on a destination, and that the 'Standard View' is superficial and very often misleading. An expanding tourism industry tends to 'crowd out' other sectors of economic activity, reducing the demand for traditional exports and import competing industries. The extent of these 'crowding out' effects depends, in turn, on the workings of labour markets, changes in prices and the real exchange rate, and the macroeconomic policy context. It is argued that these mechanisms can only properly be taken into account using Computable General Equilibrium (CGE) models rather than input-output modelling. The paper then looks at applications of CGE modelling to tourism growth in both nations and regions, classifying the various studies according to assumptions made about labour markets and government policies. The discussion has relevance for estimating the economic contribution of tourism in all destinations. The paper concludes with some observations regarding the use of CGE modelling in tourism contexts internationally and issues for further research.

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Section: Computable General Equilibrium Modelsmentioning

confidence: 99%

“…Adams & Parmenter, 1991); stand-alone models of regional economies (e.g. Meagher & Parmenter, 1990); multi-regional bottom-up models such as MONASH-MRF (Peter, 1994), and Federal (Madden, 1990;1996), and multi-country models (e.g. Hertel, 1997).…”

Section: Response and Counter Responsementioning

confidence: 99%

Economic Impacts of Inbound Tourism under Different Assumptions Regarding the Macroeconomy

Dwyer

Forsyth²,

Madden

et al. 2000

Current Issues in Tourism

161

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“…Unlike the multi-regional CGE models such as the MMRF model (Naqvi and Peter, 1996) and FEDERAL (Madden 1995), WAM is a single-regional model. In WAM, the state of Western Australia is, in e¡ect, viewed as being like a separate`country', i.e., economically, it is separated from other states, as well as from the rest of the world.…”

Section: Application Of Wammentioning

confidence: 99%

How Different is Mining from Mineral Processing? A General Equilibrium Analysis of New Resources Projects in Western Australia

1999

Aus J Agri & Res Econ

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Western Australia has experienced an investment surge in the minerals sector of the economy in recent years. Unlike previous surges, this one involves a large proportion of mineral-processing projects. In this study, the di¡erential e¡ects on the WA economy of 25 mining and 10 mineral-processing projects are analysed using an economy-wide model of WA. The results indicate that: (i) both the mining and mineral-processing projects will have substantial £ow-on bene¢ts to the WA economy as a whole; (ii) on an A$1-million-invested basis, mineral processing has larger £ow-on e¡ects on employment and generates more export revenue than does mining once the projects are operational.

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“…2 Liew (1984), however, constructed a bottom-up multiregional CGE model of Australia, using ORANI as his starting point. The first bottom-up multiregional CGE model to be used in regular policy analysis in Australia was the FEDERAL model constructed in the late 1980s (Madden, 1996). For well over a decade FEDERAL has been used in a wide range of policy-relevant analysis of Australian regions.…”

Section: Introductionmentioning

confidence: 99%

A Large‐Scale Dynamic Multi‐Regional Cge Model with an Illustrative Application

Giesecke

Madden

2003

Rev Urban & Reg Develop

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This paper describes FEDERAL-F, a large-scale general-purpose multiregional computable general equilibrium model. The model is dynamic and can be used for forecasting, policy analysis and historical analysis. Large-scale CGE models are commonly used in Australia and play a central role in policy analysis. In this paper we provide an overview of the core of FEDERAL-F's equations via a stylized representation that expresses the model's equations in functional form. An illustrative application demonstrating the power of the model is undertaken. It demonstrates that a feasible state government fiscal policy to halt Tasmania's declining share of national GDP does not exist. 3 The two main computer software packages used for solving CGE models, GEMPACK and GAMS, provide user-friendly means for economists to build large-scale models. Like most Australian economists we employ GEMPACK (Pearson, 1988, andPearson, 1996) for the simulations reported in this paper. For a description of GAMS, see Brooke, et al, 1996. While GAMS is also applicable to other applications, Rutherford (1999) has constructed a version of GAMS specifically for CGE use. GAMS operates in terms of the level of variables. However, while GEMPACK allows users to write their equations in linearised form, the GEMPAK software contains algorithms that allow it to compute the true non-linear solution (see Hertel, et al, 1992). 4 For a comprehensive survey of regional and multiregional CGE models, see Partridge and Rickman (1998). A notable feature of that survey, however, is a near absence of discussion of Australian models. 5 The main applications of MMRF (MONASH multi-regional forecasting model) during most of the 1990s, however, were comparative static, with the model's minimal dynamic properties mainly being used for updating the model's database. Examples of MMRF applications are: the economic impact of the Sydney Olympics (Madden, 2002), cumulative-causation in regional development (Dixon and Peter, 1996) and the impact of competition-policy reforms (Whiteman, 1999).

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FEDERAL: A Two-Region Multisectoral Fiscal Model of the Australian Economy

Cited by 16 publications

References 9 publications

Economic Impacts of Inbound Tourism under Different Assumptions Regarding the Macroeconomy

Economic Impacts of Inbound Tourism under Different Assumptions Regarding the Macroeconomy

How Different is Mining from Mineral Processing? A General Equilibrium Analysis of New Resources Projects in Western Australia

A Large‐Scale Dynamic Multi‐Regional Cge Model with an Illustrative Application

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