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Abstract
The present study uses a dynamic multiregional computable general equilibrium (CGE)
model to estimate the micro- andmacroeconomic effects of a hypothetical disease or pest
outbreak. Our example is a Karnal bunt incursion in wheat in Western Australia. The
extent of the incursion, the impact of the disease or pest on plant yields, the response of
buyers, the costs of eradication and the time path of the scenario contribute to outcomes
at the industry, regional, state and national levels. We decompose the contribution of
these individual direct effects to the overall impact of the incursion. This might provide
some guidance regarding areas for priority in attempting to eradicate or minimise the
impacts of a disease or pest. The study also introduces a theory of dynamic regional
labour adjustment in which economic events may lead to both real wage differentials
and worker migration between regions.