Macro and Micro Impacts of Structural Reforms in Papua New Guinea: A Computable General Equilibrium Analysis

John Asafu-Adjaye

Economic Analysis and Policy, 2003, vol. 33, issue 1, 1-22

Abstract: The Papua New Guinea economy has been subjected to a series of external shocks, starting with the Bougainville war in 1989. The government has responded with a series of structural reforms, with the most recent one being implemented in 2000. This paper employs a computable general equilibrium model to evaluate the impacts of the government's reform policies. Policies simulated are reduction in current government expenditure, reduction in real wages, tariff cuts and a goods and services tax. The results show that the export-oriented and government sectors benefit. However, the service sectors are adversely affected. While the rural population could benefit from the reforms, a case is made for increased government investment spending in these areas to stem the rural-urban drift.

JEL-codes: O11 O19 O20 (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:33:y:2003:i:1:p:1-22

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