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Abstract
In this paper, by applying a Computable General Equilibrium model for Western
Australia (called WAG), the impact of the 2002 dry season on the State’s wider economy is
quantitatively analysed. An estimate of 40 percent loss in the production of five major groups
of agricultural commodities is simulated into the model. The model results show that the
State’s economy-wide total production declines by 2.3 percent. In 2001-02 dollar terms this
production decline is worth more than $2.5 billion. The gross state product (GSP) for WA
declines by more than one percent. The total value of the State’s exports and employment
decline by 5.2 and 1.7 percent respectively.