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Modelling the Regional Economic Consequences of Efficiency Gains in the Utilities Sector

James Giesecke and John Madden ()

Economic Analysis and Policy, 2004, vol. 34, issue 1, 15-35

Abstract: There have been a number of computable general equilibrium (CGE) studies quantifying the economic impact of national competition policy (NCP). They typically involve long-run comparative static simulations with the most important shock being productivity improvements. These improvements are set equal to the productivity gap between relevant Australian industries and overseas counterparts (as measured by such methods as data envelopment analysis). The size of the estimated gaps and the assumption that NCP will eliminate them has been called into question. This paper develops an alternative approach that uses historical modelling with a dynamic multiregional CGE model (FEDERAL-F) to uncover changes, consistent with observed data, in the rate of productivity improvements in the utilities sector have had on the economies of Tasmania and mainland Australia, concentrating in particular on the Tasmanian results.

Keywords: CGE; Computable General Equilibrium; Equilibrium; General Equilibrium; Regional (search for similar items in EconPapers)
JEL-codes: D58 L52 L97 R11 (search for similar items in EconPapers)
Date: 2004
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