nep-cmp New Economics Papers
on Computational Economics
Issue of 2006‒08‒12
six papers chosen by
Stan Miles
York University

  1. The MONASH-Multi-Country (MMC) Model and the Investment Liberalisation in China's Oil Industry By Yinhua Mai
  2. Modelling the Potential Benefits of an Australia-China free Trade Agreement By Yinhua Mai; Philip Adams; Mingtai Fan; Ronglin Li; Zhaoyang Zheng
  3. National economic policy simulations with global interdependencies : a sensitivity analysis for Germany By Meyer, Bernd; Lutz, Christian; Schnur, Peter; Zika, Gerd
  4. The economics of cattle supply By D. Aadland
  5. The Displacement Effect of Labour-Market Programs: Estimates from the MONASH Model By Peter B. Dixon; Maureen T. Rimmer
  6. The Extent and Consequences of Recent Structural Changes in the Australian Economy, 1997-2002: Results from Historical/Decomposition Simulations with MONASH By James Giesecke

  1. By: Yinhua Mai
    Abstract: Computable general equilibrium models have been widely applied in analysing the effects of removing tariffs. However, not nearly as much effort has been devoted to their application on investment liberalisation that is increasingly an integral part of trade liberalisation agreements. The Monash-Multi-Country (MMC) model is developed to meet such policy needs. The MMC model is an advanced dynamic CGE model with bilateral investment flows between countries/regions modelled explicitly at an industry level. This paper describes the model structure and data of the MMC model. Its application is illustrated by a simulation of a potential investment liberalisation in China's oil industry.
    Keywords: China, oil industry, investment liberalisation, CGE modelling
    JEL: D58 F15 F21
    Date: 2005–10
  2. By: Yinhua Mai; Philip Adams; Mingtai Fan; Ronglin Li; Zhaoyang Zheng
    Abstract: In this study, we simulated three potential scenarios of an Australia-China Free Trade Agreement (FTA): removal of border protection on merchandise trade, investment facilitation, and removal of barriers to services trade. The analytical framework is a multi-country, multi-sector computable general equilibrium model, the Monash-Multi-Country (MMC) model. The FTA is found to deepen the two-country's economic partnership developed in the past fifteen or so years. On one hand, it sharpens the competitiveness of the Chinese manufacturing sector by reducing its costs of intermediate inputs. On the other hand, it raises the welfare of Australian consumers through improved terms of trade. In achieving a better utilisation of resources, adjustment of labour between sectors does occur. However, such adjustment is small in scale compared with what is occurring in the two countries amid globalisation without an FTA.
    Keywords: China, Australia, FTA, investment liberalisation
    JEL: D58 F15 F21 O53
    Date: 2005–10
  3. By: Meyer, Bernd; Lutz, Christian; Schnur, Peter (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Zika, Gerd (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Policy simulations for national economies with econometric models in general are done using a stand alone national model with exogenous export values and import prices. In a globalised world such an exercise is critical, since the policy in question may change the export prices and the import volumes of the particular country and induce via international trade a change of the economic activities of the global economy and a feed back to the export values and import prices of the particular country. The paper at hand presents a sensitivity analysis for Germany comparing the impacts of a shock on investment in a stand alone simulation using the multisector model INFORGE with the results, which occur, if the same model is linked to the global multicountry/multisector model GINFORS endogenising Germany's export values and import prices. The results are striking: The effect on real GDP is 50% higher in the global simulation than in the stand alone case. Because of the specialisation in trade the differences on the sector level are even stronger." (author's abstract, IAB-Doku) ((en))
    Date: 2006–06–01
  4. By: D. Aadland
    Abstract: This paper builds a dynamic rational expectations model describing the supply of cattle. The theoretical model improves on existing models by allowing cow-calf operators to make period-by-period investment decisions on both the cow and calf margins, separates the markets for fed and unfed beef, and considers a rich set of exogenous shocks. The model is calibrated and used to simulate artificial data that replicates several empirical regularities associated with the cattle cycle.
    JEL: C61 Q11 Q12
  5. By: Peter B. Dixon; Maureen T. Rimmer
    Abstract: A key question concerning labour-market programs is the extent to which they generate jobs for their target group at the expense of others. This effect is measured by displacement percentages. We describe a version of the MONASH model designed to quantify the effects of labour-market programs. Our simulation results suggests that: (1) labour-market programs can generate significant long-run increases in employment; (2) displacement percentages depend on how a labour-market program affects the income trade-off faced by target and non-target groups between work and non-work; and (3) displacement percentages are larger in the short run than in the long run.
    Keywords: labour-market programs, displacement percentage, CGE modelling
    JEL: C68 J23 J63
    Date: 2005–07
  6. By: James Giesecke
    Abstract: The paper describes historical and decomposition simulations of the Australian economy undertaken with the MONASH model. The simulations cover the period 1996/97 to 2001/02. The paper first describes the historical simulation. In the historical simulation, many of those sectoral variables in MONASH which represent observable features of the economy are determined exogenously. This allows the model to calculate the outcomes for sectoral variables describing (typically unobservable) features of the economy's structure, such as industry production technologies and household tastes. The estimates for these structural and taste variables play a key role in explaining the observable features of the economy over the study period. To isolate the contribution of each of these structural features to observed economic outcomes, they are fed back into the model as exogenous shocks in the decomposition simulation. The decomposition simulation is then used to explain the causes of major changes in the Australian economy over the period 1996/97 - 2001/02 in terms of changes in technologies, tastes and other structural variables.
    Date: 2004–12

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