Forecasting small-area agricultural incomes using a CGE model of the Australian economy

Higgs, Peter J.; Powell, Andrew

doi:10.1007/bf01579893

Cited by 4 publications

(4 citation statements)

References 7 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Seminal works applying CGE techniques to subnational regions include those of Jones and Whalley (1986) and Harrigan and McGregor (1989). By modeling the regional economy as a share of the national economy, Higgs, Parmenter, and Rimmer (1988) and Higgs and Powell (1990) were able to use a national CGE model of Australia to model the Australian states. However, these models do not incorporate region-specific marketclearing prices.…”

Section: Introductionmentioning

confidence: 99%

State Tax Policy, Labor, and Tax Revenue Feedback Effects

Berck

Golan

Smith³

1997

Industrial Relations

View full text Add to dashboard Cite

A new computable general equilibrium model is used to predict the effects of tax rate changes on employment and other macrovariables in California. The model is dynamic in accounting for both migration and investment. The relative strength of migration, labor force participation, and investment in causing taxrate-decrease-induced growth is examined. The model is used to contrast expected effects of a tax rate increase with and without migration and investment. among the states. Attracting migrants by cutting state taxes gives states a way to increase labor supply that the United States does not have. Similarly, there is reason to believe that capital can be quite mobile among the states. Thus, state tax cuts could engender larger labor supply responses and more investment than federal tax cuts, and therefore state tax cuts could be closer to self-financing than federal tax cuts would be.There are two chief offsetting effects. The first is that capital markets are national so that state tax policy cannot affect interest rates or the overall national level of investment. The second is that state taxes are deductible against federal taxes, so some of the benefits of a state tax rate decrease accrue to the United States rather than to residents of the state.To find the sum of all these effects requires a comprehensive general equilibrium model. In this article we use a computable general equilibrium (CGE) model of the state of California to evaluate two types of tax cuts, a cut in the Personal Income tax (PIT) rates and a cut in the Bank and Corporation tax (B&CT) rates.A CGE model is a set of equations that describes the economic activities of consumers, producers, government, and traders in the markets for factors of production, output, exports, and imports. A CGE model requires that quantities supplied and demanded in each market be equilibrated by market-clearing prices. There is a long history of using CGE models to evaluate national tax policy (Shoven and Whalley 1984), and there are several CGE models of the California economy (Berck, Robinson, and Goldman 1991;Despotakis and Fisher 1988;Hoffman, Robinson, and Subramanian forthcoming;Robinson, Subramanian, and Geoghegan 1993; Smith 1994). 1 These models of the California economy are derivatives of national CGEs and are not detailed enough in the modeling of government or factor mobility to be used to model tax rate changes. The California Department of Finance (DOF), with assistance from these authors, constructed a new CGE model of California. It is called the Dynamic Revenue Analysis Model (DRAM) (Berck, Golan, and Smith 1996). The structure of DRAM is very similar to the other CGE models of 400 / PETER BERCK, ELISE GOLAN, AND BRUCE SMITH State Tax Policy, Labor, and Tax Revenue Feedback Effects / 401

show abstract

Section: Introductionmentioning

confidence: 99%

State Tax Policy, Labor, and Tax Revenue Feedback Effects

Berck

Golan

Smith³

1997

Industrial Relations

View full text Add to dashboard Cite

show abstract

“…Two top-down approaches, the balanced model and the shared model, have been incorporated into a few CGE models. The ORANI model of Australia (Higgs and Powell 1990, Higgs et al 1988, Dixon et al 1982) uses the balanced approach, and the model constructed by Stem et al (1992) uses the shared approach. These two alternative top-down models, along with our improvements to the balanced model, are described in the remainder of this section.…”

Section: Consistent Modeling Of National and Regional Economiesmentioning

confidence: 99%

“…The fourth term of equation ( 2) indicates that regional household demand for local sector output is the product of the region's share of total factor income, wr, and the vector of national household demand for local sector output, C 1 . Previous CGE applications of the balanced allocation (e.g., Dixon et al 1982, Higgs andPowell 1990) allocated household consumption demand according to each region's share of labor income, ignoring the role of capital income in determining regional demand for local production. The approach taken here improves on this previous work by allocating household demand according to the region's share of total factor income, as expressed in equation ( 3 (3)…”

Section: Consistent Modeling Of National and Regional Economiesmentioning

confidence: 99%

Regional Impacts of Farm Programs: A Top-Down CGE Analysis

Bernat¹,

Hanson²

1995

Review of Regional Studies

View full text Add to dashboard Cite

This paper analyzes the regional impacts of changing a major component of national farm policy. Using a national-level computable general equilibrium (CGE), we estimate the national impacts of removing deficiency payments, one of the primary components of U.S. farm programs. We then use two top-down methods of regionalization to analyze the regional impacts. While both top-down methods are easy to implement, the analysis demonstrates the importance of accounting for the presence of local linkages in assessing regional impacts of policy changes. The analysis indicates that elimination of the deficiency payment• program would result in efficiency gains at the national level, but because of the reallocation of resources, nonmetropolitan regions would lose and metropolitan regions would gain.

show abstract

“…6). Tho other variants of the "topsdown" methodology were used for regional forecasting in the 'eighties: the first was applied to the industries of a region (the Goulburn valley) within a state (Victoria) by Johnson (1988); the second to a subset (South-West Victoria) of an ORANI zonal industry (the High Rainfall Zone) by Higgs and Powell (1990).…”

Section: Regional Versions Of Oranimentioning

confidence: 99%

A Decade of Applied General Equilibrium Modelling at the University of Melbourne

Powell

1993

J of App Econs and Policy

Self Cite

View full text Add to dashboard Cite

a7 1982); namely, the development of the GEMPACK computer modelling environment. In Section 6 some significant applied GE developments with less of an ORANI focus are mentioned. Section 7 contains details of graduate student involvement: whilst viewing their professional formation as part of the "tool-kit" strains the analogy somewhat, this investment in human capital is of importance comparable to the methodological developments surveyed.2. Survey of review papers 2.1 Relationship of applied general equilibrium to macro models By the late 'seventies policy economists had become used to the idea that there was more than one sort of model available. Applied macro modellers and members of the newer school of applied general equilibrium economics behaved as if the other party simply did not exist. At the beginning of the decade under review I explored the scope for reconciliation between the two schools (Powell, 1981), and saw some hope of rapprochement between them. This was evident in the success of Cooper and McLaren (1980, 1982; see also Cooper, 1983, andPowell, 1985) in interfacing a small continuous-time macro model (RBII) with a large applied general equilibrium model (ORANI).Parsell, Powell and Wilcoxen (1989,1991) noted that the developments in theoretical open-economy macro models of the 1980s had been taken up by some applied workers (as in the Murphy Model by Chris Murphy and in the MSG2 Model by Warwick McKibbin and Jeffrey Sachs), and that this had considerably narrowed the gap between applied GE and macm-modelsconsequently, the chances for a synthesis of the two schools had never looked better. This was because the new applied macro modellers were insisting that their models converged over time to neo-classically interpretable steady states or balanced growth paths: this implied, among other things, that agents (including governments) were restrained by intertemporal budget constraints.Cooper and McLaren's work was recently revived using a modern macro model with rational expectations in financial markets (Breece. McLaren, Murphy and Powell, 1991). Although some conflicts in model design remained

show abstract

Forecasting small-area agricultural incomes using a CGE model of the Australian economy

Cited by 4 publications

References 7 publications

State Tax Policy, Labor, and Tax Revenue Feedback Effects

State Tax Policy, Labor, and Tax Revenue Feedback Effects

Regional Impacts of Farm Programs: A Top-Down CGE Analysis

A Decade of Applied General Equilibrium Modelling at the University of Melbourne

Contact Info

Product

Resources

About