THE RELATIVE SIGNIFICANCE OF A RANGE OF ECONOMIC POLICIES FOR IMPROVING AUSTRALIA'S BALANCE OF TRADE

Andrew B. Stoeckel and Peter J. Higgs

Australian Journal of Agricultural Economics, 1988, vol. 32, issue 2-3, 19

Abstract: Australia faces a very serious trade problem. A large improvement in the balance of trade is required simply to stop its international debt from rising above levels which are already considered too high. In this paper, a range of economic policies are examined. Each generates a $A1 billion improvement (in 1985-86 prices) in the balance of trade after about 2 years. The following economic shocks are examined: an increase in world agricultural prices; a cut in real wages; a reduction in protection for manufacturing industries; a change in the tax mix in favour of indirect taxation; and a contraction in real domestic absorption. The impacts of these shocks are derived from simulations with ORANI, a computable general equilibrium model of the Australian economy. The effects of these shocks on the agricultural sector are studied in detail.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ajaeau:22962

DOI: 10.22004/ag.econ.22962

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