A regional framework for analysing the Western Australian economy

Alan Duncan and Ken Leong ()
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Ken Leong: Bankwest Curtin Economics Centre, Curtin Business School

No WP1405, Bankwest Curtin Economics Centre Working Paper series from Bankwest Curtin Economics Centre (BCEC), Curtin Business School

Abstract: Western Australia is a diverse state with unique regions. Studies on the economy that adopt a ‘one size fits all’ approach’ are likely to be hindered by a lack of the richness and variability inherent in the intra-state regions. This paper proposes a modelling framework for the Western Australian macroeconomy by utilising existing and constructed data on its ten regions. As an export-oriented state, WA is affected by external factors such as the exchange rate, commodity prices and developments in emerging economies. However, with different composition of domestic- versus external-facing industrial sectors, each region is expected to respond differently to such shocks. Initial projections suggest WA’s growth is likely to decrease from its present 5.1 per cent to between 5-7 per cent through 2013-2014. When hit with an adverse shock to commodity prices initiated by, for example, a structural change in the Chinese economy, the mining-intensive region of Pilbara suffers by a factor of 3 percentage points in the near term over less exposed regions such as Great Southern and Peel.

Keywords: Western Australian economy; gross regional product; regional analysis; industrial composition; forecasting; simulation. (search for similar items in EconPapers)
JEL-codes: E01 E17 R11 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-06
New Economics Papers: this item is included in nep-mac and nep-ure
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