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Abstract

In long-run closures of the ORANI model of the Australian economy, the responses of endogenous exporting industries other than agriculture (which is characterized by the fixity of the land base) can be very large. The main.industries exhibiting such behaviour are in the mining sector. If this behaviour is seen as implausible, then some aspects of the model's structural-form equations, database, parameter file. or closure, must be altered. In this paper we canvass the alternatives, concentrating on the industries' supply curves. We give details of a proposal which we believe gives the best prospects for constraining long-run supply elasticities in an orderly and interpretable manner.

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