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

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.


Issue Date:
1988-08
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/22962
Published in:
Australian Journal of Agricultural Economics, Volume 32, Number 2-3
Page range:
69-87
Total Pages:
19




 Record created 2017-04-01, last modified 2017-08-24

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