This paper explains why evidence-based trade policy decision making is heavily reliant on results generated by CGE models and why the development and application of these modeling has been particularly active in Australia. The paper provides a short history of CGE modeling and describes the impetus to the field provided by two factors: (a) the failures of less theoretically formal approaches; and (b) the recognition of the ability of CGE modeling to handle policy-relevant detail. The paper argues that CGE modeling flourished in Australia because Australia had the right issue, the right institutions and the right model.
