The Impact of a Range of Economic Policies on Australia's Balance of Trade

Peter Higgs and Andy Stoeckel

No 295038, Impact Project Archive from Impact Research Centre, University of Melbourne

Abstract: Australia faces a very serious trade problem. A large improvement in our balance of trade is required simply to stop our international debt from rising above levels which are already considered too high. In this paper a range of economic policies are examined. Each generate 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 (hereafter CGE) model of the Australian economy. The effects of these shocks on the agricultural sector are studied in detail.

Keywords: International Relations/Trade; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 33
Date: 1987-09
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ircipa:295038

DOI: 10.22004/ag.econ.295038

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