Mark Horridge | Victoria University Australia (original) (raw)

Papers by Mark Horridge

Brazil has traditionally been one of the most important sugarcane and ethanol producers. Since 19... more Brazil has traditionally been one of the most important sugarcane and ethanol producers. Since 1975, when the National Ethanol Program (Programa Nacional do Alcool – Proalcool) was created, the country has produced fuel ethanol on a large scale. The increase in sugar exports in the nineties, which competed with inputs to

Spatial CGE models rely on detailed information from multiregional input-output systems. Multireg... more Spatial CGE models rely on detailed information from multiregional input-output systems. Multiregional input-output tables (IOT) are usually not available and have to be compiled. This paper compares two different approaches to compile regional IOT – algorithm based approach that mechanically regionalizes national IOT using a predefined set of regional variables and hybrid approach that uses as much regional data as possible. We aim at verifying whether a use of a given approach has a significant impact on CGE simulation results. In our case, we compile regional IOT for Austria applying ready-made Horridge algorithm and a hybrid approach. We find that aggregate simulation results are surprisingly similar. As a result, we could claim that algorithm based approach is in fact an effective way of regionalizing national IOT. However, once we compare the results at the sectoral level they start to differ significantly. This may raise serious concerns about the adequacy of certain results ...

In this paper we analyze the economic and environmental effects of the new Brazilian Forest Code,... more In this paper we analyze the economic and environmental effects of the new Brazilian Forest Code, when compared to the previous version. A general equilibrium model of Brazil, tailored for land use change and emissions analysis is used. It´s a dynamic, inter-regional and “bottom-up” model, with a land use and emissions module. Two versions of the Forest Code are analyzed: the original (old) forest code, and the new version approved recently, and still awaiting implementation. The scenarios are based on satellite imagery generated in the AgLue Project. Results point to a significant reduction in greenhouse gases emissions in both versions of the forest code, although higher in the previous version. The economic costs associated are found not to be very high, although different across different states.

Economy-Wide Modeling of Water at Regional and Global Scales, 2019

Regional expansion of irrigated agriculture may minimize risks for the farmer and strengthen food... more Regional expansion of irrigated agriculture may minimize risks for the farmer and strengthen food security for future generations. However, at the same time, it has a damaging effect on water availability and may worsen episodes of micro regional water scarcity. In this paper, we analyze scenarios of irrigation expansion in the Brazilian agriculture, using a computable general equilibrium model (the TERM-BR model) to assess the impacts on water demand for 2025. Simulations were carried out for areas deemed potentially suitable for irrigation based on National Water Resources Plan (PNRH) and Ministry of National Integration report (MI). We increase the regional detail to focus on some of the Brazilian Northeastern States, in order to assess the balance between regional water supply (as determined by the Climatic Water Balance) and demand. The comparative results of the Climatic Water Balance and the TERM-BR model for the region point to potential water availability problems in specif...

GTAPAgg is a Windows program used to prepare data bases for the GTAP economic model. The GTAP Ver... more GTAPAgg is a Windows program used to prepare data bases for the GTAP economic model. The GTAP Version 9 Data Base covers 57 commodities and 140 regions. Nearly all applications of the GTAP Model use an aggregation of this data base. GTAPAgg helps you prepare an aggregation scheme, then uses your scheme to prepare an aggregated data base for the GTAP Model. For version 9 of GTAP Data Base, we have three GTAPAgg packages, one each for the years 2004, 2007 and 2011. The program is very simple to use and is accompanied by an online help file.

The sharp increase in Australia's terms of trade since 2003-04 has dramatic regional and sect... more The sharp increase in Australia's terms of trade since 2003-04 has dramatic regional and sectoral implications. Mining-intensive regions have gained from the jump in export prices. Import-competing sectors have faced greater competition both from falling import prices and due to rising demand for domestic factors from the mining sectors. The drought of 2006 will widen the gap between winning and losing regions. In Indonesia, even if we assume that the oil extraction sector is facing resource depletion, a long-run terms-of-trade improvement may result in aggregate consumption increasing should real GDP fall relative to the base case. The TERM framework is highly suitable for modelling Brazil and China, each with around 30 regions.

Objective To show how to produce a map with regions shaded according to a vector of regional resu... more Objective To show how to produce a map with regions shaded according to a vector of regional results from a GTAP simulation. Methodology The presentation will demonstrate (a) how to produce a map of the world containing the regions distinguished by a particular GTAP simulation; (b) how to shade or color the regions according to a vector of regional simulations; and (c) how to paste the shaded map into a Word document or PowerPoint slideshow. The paper includes detailed instructions for completing these and other tasks. Data and Anticipated Findings [Not relevant here] Summary Maps are a natural way to present results from regional economic models, and are particularly useful for slideshow presentations. Unfortunately, commercial mapping (aka GIS) programs are expensive and complicated. By comparison, the ShadeMap program has limited capabilities, but is free and simple to use. To assist GTAP users, the ShadeMap package includes region boundary files (ie, maps) for versions 5, 5.4, 6...

The ORANI applied general equilibrium (AGE) model of the Australian econ- omy has been widely use... more The ORANI applied general equilibrium (AGE) model of the Australian econ- omy has been widely used by academics and by economists in the government and private sectors. We describe a generic version of the model, ORANI-G, designed for expository purposes and for adaptation to other countries. Our description of the model's equations and database is closely integrated with an explanation of how the model is solved using the GEMPACK system. The intention is to provide a convenient starting-point for those wishing to use or construct a similar AGE model. Computer files are available, which contain a complete model specification and database. ORANI-G forms the basis of an annual modelling course, and has been adapted to build models of South Africa, Brazil, Ireland, Pakistan, Sri Lanka, Fiji, South Korea, Denmark, Vietnam, Thailand, Indonesia, Philippines and both Chinas.

This document is designed for use at the GTAP Short Course held June 2005 in Crete. It can also b... more This document is designed for use at the GTAP Short Course held June 2005 in Crete. It can also be used after the course by participants in conjunction with the RunGTAP and GEMPACK software they take home with them from the course. And, with certain limitations mentioned in the next paragraph, this document will also be very useful to others learning to use RunGTAP. This document assumes that you have (a) a recent version of RunGTAP 2 (version 3.10 or later, dated July 2001 or later), and (b) a Pentium PC with a hard disk, at least 32 Mb of RAM (memory), running Microsoft Windows 95, 98, ME, NT, 2000 or XP. (c) a Source-Code or Executable-Image version of Release 7.0 or later of GEMPACK 3 , together with various GTAP-related files in a directory \GTAP on your computer. 4 If you do NOT have item (c)-GEMPACK licence and course files-you will be able to carry out most but not all of the activities described in this document. Boxes like this in the text indicates which sections require a GEMPACK licence. If you do not have a licence, either skip over these sections, or read through them without touching the keyboard. Activities using WinGEM require a GEMPACK licence.

The most remarkable change the WTO accession brings to China is the opening up to Foreign Direct ... more The most remarkable change the WTO accession brings to China is the opening up to Foreign Direct Investment of pillar manufacturing and services industries that have been monopolized or dominated by State Owned Enterprises. This study analyses the effects of this change using a Computable General Equilibrium model of China. The study draws on China’s experience in the early 1990s when state capital withdrew from light manufacturing industries leading to a massive inflow of foreign direct investment. In contrast to most general equilibrium analysis focusing on tariffs and non-tariff barriers, this study concludes that WTO accession will not threaten the health of China’s pillar industries. Opening up of the pillar industries to non-state capital will bring about improvement in productivities following the inflow of foreign direct investment into these industries. WTO accession thus positions China to become an important production base of not only light manufacturing industries, but ...

Science of The Total Environment

We develop and link the Integrated Economic-Environmental Modeling (IEEM) Platform to ecosystem s... more We develop and link the Integrated Economic-Environmental Modeling (IEEM) Platform to ecosystem services modeling (ESM). The IEEM+ESM Platform is an innovative decision-making framework for exploring complex public policy goals and elucidating synergies and trade-offs between alternative policy portfolios. The IEEM+ESM approach is powerful in its ability to shed light on (i) change in land use and ecosystem services driven by public policy and the supply and demand responses of businesses and households; and (ii) impacts on standard economic indicators of concern to Ministries of Finance such as gross domestic product and employment, as well as changes in wealth and ecosystem services. The IEEM+ESM approach is being adopted rapidly and by the end of 2020, IEEM+ESM Platforms will be implemented for about 25 countries. To demonstrate the insights generated by the IEEM+ESM approach, we apply it to the analysis of alternative green growth strategies in Rwanda, a country that has made strong progress in reducing poverty and enhancing economic growth in the last 15 years. The case of Rwanda is particularly compelling as it faces intense pressure on its natural capital base and ecosystem services, already with the highest population density in Africa, which is projected to double by 2050. In applying IEEM+ESM and comparing the outcomes of Rwanda's green growth policies, increasing fertilization of agricultural crops shows the largest economic gains but also trade-offs in environmental quality reflected through higher nutrient export and reduced water quality. Combining crop fertilization with forest plantations better balances critical ecosystem services and their role in underpinning economic development as Rwanda progresses toward its target of middle-income status by 2035. This application to Rwanda's green growth strategy demonstrates the value-added of the IEEM+ESM approach in generating results that speak to both economic outcomes and impacts on market and non-market ecosystem services.

Asian Development Review

Indonesia has introduced a moratorium on the conversion of natural forests to land used for palm ... more Indonesia has introduced a moratorium on the conversion of natural forests to land used for palm oil production. Using a dynamic, bottom-up, interregional computable general equilibrium model of the Indonesian economy, we assess several scenarios of the moratorium and discuss its impacts on the domestic economy as well as on regional economies within Indonesia. We find the moratorium reduces Indonesian economic growth and other macroeconomic indicators, but international transfers can more than compensate the welfare losses. The impacts also vary across regions. Sumatra, which is highly dependent on palm oil and is home to forests that no longer have a high carbon stock, receives fewer transfers and suffers the greatest economic loss. Kalimantan, which is relatively less dependent on palm oil and has forests with a relatively high carbon stock, receives more transfers and gets greater benefit. This implies that additional policy measures anticipating the unbalanced impacts of the mo...

Environmental and Resource Economics

This paper develops and operationalizes the integrated economic-environmental modelling (IEEM) pl... more This paper develops and operationalizes the integrated economic-environmental modelling (IEEM) platform which integrates environmental data organized under the first international system of environmental economic accounting with a powerful dynamic economy-wide modelling approach. IEEM enables the ex-ante economic analysis of policies on the economy and the environment in a quantitative, comprehensive and consistent framework. IEEM elucidates the two-way interrelationships between the economy and environment, considering how economic activities depend on the environment as a source of inputs and as a sink for their outputs. In addition to standard economic impact indicators such as gross domestic product, income and employment, IEEM generates indicators that describe policy impacts on the use of environmental resources, wealth and environmental quality which together determine prospects for future economic growth and well-being. To illustrate the analytical capabilities of IEEM, the model is calibrated with Guatemala’s SEEA and applied to analysis of its forest and fuelwood sector where negative health and environmental impacts arise from inefficient fuelwood use.

Accession to the World Trade Organization (WTO) marks a new era in China's economic reform. I... more Accession to the World Trade Organization (WTO) marks a new era in China's economic reform. In this new era, state capital will lose its dominance of pillar industries such as iron and steel, automobile, petrochemicals, non-ferrous metal, insurance, telecommunication, banking, wholesale, and utilities. This study uses a computable general equilibrium model of China to estimate the economic benefits from China

TERM (The Enormous Regional Model) is a "bottom-up " CGE model of Australia which treat... more TERM (The Enormous Regional Model) is a "bottom-up " CGE model of Australia which treats each region as a separate economy. TERM was created specifically to deal with highly disaggre-gated regional data while providing a quick solution to simulations. This makes it a useful tool for examining the regional impacts of shocks that may be region-specific. We include some details of how we prepared the TERM database, using a national input-output table, together with regional data showing output (for agriculture) and employment (in other sectors) for each of 144 sectors and 57 regions [the Australian statistical divisions]. Using a 38-sector, 45-region aggregation of the model, we simulate the short-run effects of the Australian drought of 2002-03, which was the most widespread for 20 years. The effects on some statistical divisions are extreme, with income losses of up to 20 per cent. Despite the relatively small share of agriculture in Australian GDP, the drought reduces GDP ...

Modern CGE models can boast considerable sectoral detail. However, it is obvious that output of (... more Modern CGE models can boast considerable sectoral detail. However, it is obvious that output of (say) electronic components, must be quite heterogeneous. Hence, since Leontief, multisectoral models tend to measure quantities not in physical units but in effective economic units (usually initial-dollars-worth). The CET functional form, close cousin to CES, is used to allocate a fixed resource between alternate uses; for example land between crops, or workers between sectors. It works well when both input and output quantities are measured in initial-dollars-worth, such as land rental values. Because CET chooses a crop mix to maximize revenue, it is welfare-neutral -- a small change in land allocation will not affect land's contribution to GDP. This is a desirable property. But CET translates poorly into physical units: we typically find that if percent changes in (effective) land use are interpreted as percent changes in crop areas, then total land area is not fixed. This can be ...

Given that the General Equilibrium (GE) models such as GTAP are highly aggregated, it is difficul... more Given that the General Equilibrium (GE) models such as GTAP are highly aggregated, it is difficult to capture the tariff and trade-flow variations at disaggregate levels in these models. On the other hand, Partial Equilibrium (PE) models, which can be used for analysis at disaggregate levels, deprive the researcher of the benefits of an economy-wide analysis, which are crucial to examine trade policy impacts. Therefore, a CGE framework that is nested with a Partial Equilibrium model is an ideal tool to carry out trade policy analysis at disaggregated levels. We develop a Partial Equilibrium model in this paper, using some CET and CES nests, market clearing conditions and price linkages and nest it within the standard GTAP model, calling it a PE-GE model. The primary advantage of this new work is that it is undertaken in conjunction with the standard GTAP model, thereby making it readily available to users of that model, along with all of the decomposition tools that have been develo...

Brazil has traditionally been one of the most important sugarcane and ethanol producers. Since 19... more Brazil has traditionally been one of the most important sugarcane and ethanol producers. Since 1975, when the National Ethanol Program (Programa Nacional do Alcool – Proalcool) was created, the country has produced fuel ethanol on a large scale. The increase in sugar exports in the nineties, which competed with inputs to

Spatial CGE models rely on detailed information from multiregional input-output systems. Multireg... more Spatial CGE models rely on detailed information from multiregional input-output systems. Multiregional input-output tables (IOT) are usually not available and have to be compiled. This paper compares two different approaches to compile regional IOT – algorithm based approach that mechanically regionalizes national IOT using a predefined set of regional variables and hybrid approach that uses as much regional data as possible. We aim at verifying whether a use of a given approach has a significant impact on CGE simulation results. In our case, we compile regional IOT for Austria applying ready-made Horridge algorithm and a hybrid approach. We find that aggregate simulation results are surprisingly similar. As a result, we could claim that algorithm based approach is in fact an effective way of regionalizing national IOT. However, once we compare the results at the sectoral level they start to differ significantly. This may raise serious concerns about the adequacy of certain results ...

In this paper we analyze the economic and environmental effects of the new Brazilian Forest Code,... more In this paper we analyze the economic and environmental effects of the new Brazilian Forest Code, when compared to the previous version. A general equilibrium model of Brazil, tailored for land use change and emissions analysis is used. It´s a dynamic, inter-regional and “bottom-up” model, with a land use and emissions module. Two versions of the Forest Code are analyzed: the original (old) forest code, and the new version approved recently, and still awaiting implementation. The scenarios are based on satellite imagery generated in the AgLue Project. Results point to a significant reduction in greenhouse gases emissions in both versions of the forest code, although higher in the previous version. The economic costs associated are found not to be very high, although different across different states.

Economy-Wide Modeling of Water at Regional and Global Scales, 2019

Regional expansion of irrigated agriculture may minimize risks for the farmer and strengthen food... more Regional expansion of irrigated agriculture may minimize risks for the farmer and strengthen food security for future generations. However, at the same time, it has a damaging effect on water availability and may worsen episodes of micro regional water scarcity. In this paper, we analyze scenarios of irrigation expansion in the Brazilian agriculture, using a computable general equilibrium model (the TERM-BR model) to assess the impacts on water demand for 2025. Simulations were carried out for areas deemed potentially suitable for irrigation based on National Water Resources Plan (PNRH) and Ministry of National Integration report (MI). We increase the regional detail to focus on some of the Brazilian Northeastern States, in order to assess the balance between regional water supply (as determined by the Climatic Water Balance) and demand. The comparative results of the Climatic Water Balance and the TERM-BR model for the region point to potential water availability problems in specif...

GTAPAgg is a Windows program used to prepare data bases for the GTAP economic model. The GTAP Ver... more GTAPAgg is a Windows program used to prepare data bases for the GTAP economic model. The GTAP Version 9 Data Base covers 57 commodities and 140 regions. Nearly all applications of the GTAP Model use an aggregation of this data base. GTAPAgg helps you prepare an aggregation scheme, then uses your scheme to prepare an aggregated data base for the GTAP Model. For version 9 of GTAP Data Base, we have three GTAPAgg packages, one each for the years 2004, 2007 and 2011. The program is very simple to use and is accompanied by an online help file.

The sharp increase in Australia's terms of trade since 2003-04 has dramatic regional and sect... more The sharp increase in Australia's terms of trade since 2003-04 has dramatic regional and sectoral implications. Mining-intensive regions have gained from the jump in export prices. Import-competing sectors have faced greater competition both from falling import prices and due to rising demand for domestic factors from the mining sectors. The drought of 2006 will widen the gap between winning and losing regions. In Indonesia, even if we assume that the oil extraction sector is facing resource depletion, a long-run terms-of-trade improvement may result in aggregate consumption increasing should real GDP fall relative to the base case. The TERM framework is highly suitable for modelling Brazil and China, each with around 30 regions.

Objective To show how to produce a map with regions shaded according to a vector of regional resu... more Objective To show how to produce a map with regions shaded according to a vector of regional results from a GTAP simulation. Methodology The presentation will demonstrate (a) how to produce a map of the world containing the regions distinguished by a particular GTAP simulation; (b) how to shade or color the regions according to a vector of regional simulations; and (c) how to paste the shaded map into a Word document or PowerPoint slideshow. The paper includes detailed instructions for completing these and other tasks. Data and Anticipated Findings [Not relevant here] Summary Maps are a natural way to present results from regional economic models, and are particularly useful for slideshow presentations. Unfortunately, commercial mapping (aka GIS) programs are expensive and complicated. By comparison, the ShadeMap program has limited capabilities, but is free and simple to use. To assist GTAP users, the ShadeMap package includes region boundary files (ie, maps) for versions 5, 5.4, 6...

The ORANI applied general equilibrium (AGE) model of the Australian econ- omy has been widely use... more The ORANI applied general equilibrium (AGE) model of the Australian econ- omy has been widely used by academics and by economists in the government and private sectors. We describe a generic version of the model, ORANI-G, designed for expository purposes and for adaptation to other countries. Our description of the model's equations and database is closely integrated with an explanation of how the model is solved using the GEMPACK system. The intention is to provide a convenient starting-point for those wishing to use or construct a similar AGE model. Computer files are available, which contain a complete model specification and database. ORANI-G forms the basis of an annual modelling course, and has been adapted to build models of South Africa, Brazil, Ireland, Pakistan, Sri Lanka, Fiji, South Korea, Denmark, Vietnam, Thailand, Indonesia, Philippines and both Chinas.

This document is designed for use at the GTAP Short Course held June 2005 in Crete. It can also b... more This document is designed for use at the GTAP Short Course held June 2005 in Crete. It can also be used after the course by participants in conjunction with the RunGTAP and GEMPACK software they take home with them from the course. And, with certain limitations mentioned in the next paragraph, this document will also be very useful to others learning to use RunGTAP. This document assumes that you have (a) a recent version of RunGTAP 2 (version 3.10 or later, dated July 2001 or later), and (b) a Pentium PC with a hard disk, at least 32 Mb of RAM (memory), running Microsoft Windows 95, 98, ME, NT, 2000 or XP. (c) a Source-Code or Executable-Image version of Release 7.0 or later of GEMPACK 3 , together with various GTAP-related files in a directory \GTAP on your computer. 4 If you do NOT have item (c)-GEMPACK licence and course files-you will be able to carry out most but not all of the activities described in this document. Boxes like this in the text indicates which sections require a GEMPACK licence. If you do not have a licence, either skip over these sections, or read through them without touching the keyboard. Activities using WinGEM require a GEMPACK licence.

The most remarkable change the WTO accession brings to China is the opening up to Foreign Direct ... more The most remarkable change the WTO accession brings to China is the opening up to Foreign Direct Investment of pillar manufacturing and services industries that have been monopolized or dominated by State Owned Enterprises. This study analyses the effects of this change using a Computable General Equilibrium model of China. The study draws on China’s experience in the early 1990s when state capital withdrew from light manufacturing industries leading to a massive inflow of foreign direct investment. In contrast to most general equilibrium analysis focusing on tariffs and non-tariff barriers, this study concludes that WTO accession will not threaten the health of China’s pillar industries. Opening up of the pillar industries to non-state capital will bring about improvement in productivities following the inflow of foreign direct investment into these industries. WTO accession thus positions China to become an important production base of not only light manufacturing industries, but ...

Science of The Total Environment

We develop and link the Integrated Economic-Environmental Modeling (IEEM) Platform to ecosystem s... more We develop and link the Integrated Economic-Environmental Modeling (IEEM) Platform to ecosystem services modeling (ESM). The IEEM+ESM Platform is an innovative decision-making framework for exploring complex public policy goals and elucidating synergies and trade-offs between alternative policy portfolios. The IEEM+ESM approach is powerful in its ability to shed light on (i) change in land use and ecosystem services driven by public policy and the supply and demand responses of businesses and households; and (ii) impacts on standard economic indicators of concern to Ministries of Finance such as gross domestic product and employment, as well as changes in wealth and ecosystem services. The IEEM+ESM approach is being adopted rapidly and by the end of 2020, IEEM+ESM Platforms will be implemented for about 25 countries. To demonstrate the insights generated by the IEEM+ESM approach, we apply it to the analysis of alternative green growth strategies in Rwanda, a country that has made strong progress in reducing poverty and enhancing economic growth in the last 15 years. The case of Rwanda is particularly compelling as it faces intense pressure on its natural capital base and ecosystem services, already with the highest population density in Africa, which is projected to double by 2050. In applying IEEM+ESM and comparing the outcomes of Rwanda's green growth policies, increasing fertilization of agricultural crops shows the largest economic gains but also trade-offs in environmental quality reflected through higher nutrient export and reduced water quality. Combining crop fertilization with forest plantations better balances critical ecosystem services and their role in underpinning economic development as Rwanda progresses toward its target of middle-income status by 2035. This application to Rwanda's green growth strategy demonstrates the value-added of the IEEM+ESM approach in generating results that speak to both economic outcomes and impacts on market and non-market ecosystem services.

Asian Development Review

Indonesia has introduced a moratorium on the conversion of natural forests to land used for palm ... more Indonesia has introduced a moratorium on the conversion of natural forests to land used for palm oil production. Using a dynamic, bottom-up, interregional computable general equilibrium model of the Indonesian economy, we assess several scenarios of the moratorium and discuss its impacts on the domestic economy as well as on regional economies within Indonesia. We find the moratorium reduces Indonesian economic growth and other macroeconomic indicators, but international transfers can more than compensate the welfare losses. The impacts also vary across regions. Sumatra, which is highly dependent on palm oil and is home to forests that no longer have a high carbon stock, receives fewer transfers and suffers the greatest economic loss. Kalimantan, which is relatively less dependent on palm oil and has forests with a relatively high carbon stock, receives more transfers and gets greater benefit. This implies that additional policy measures anticipating the unbalanced impacts of the mo...

Environmental and Resource Economics

This paper develops and operationalizes the integrated economic-environmental modelling (IEEM) pl... more This paper develops and operationalizes the integrated economic-environmental modelling (IEEM) platform which integrates environmental data organized under the first international system of environmental economic accounting with a powerful dynamic economy-wide modelling approach. IEEM enables the ex-ante economic analysis of policies on the economy and the environment in a quantitative, comprehensive and consistent framework. IEEM elucidates the two-way interrelationships between the economy and environment, considering how economic activities depend on the environment as a source of inputs and as a sink for their outputs. In addition to standard economic impact indicators such as gross domestic product, income and employment, IEEM generates indicators that describe policy impacts on the use of environmental resources, wealth and environmental quality which together determine prospects for future economic growth and well-being. To illustrate the analytical capabilities of IEEM, the model is calibrated with Guatemala’s SEEA and applied to analysis of its forest and fuelwood sector where negative health and environmental impacts arise from inefficient fuelwood use.

Accession to the World Trade Organization (WTO) marks a new era in China's economic reform. I... more Accession to the World Trade Organization (WTO) marks a new era in China's economic reform. In this new era, state capital will lose its dominance of pillar industries such as iron and steel, automobile, petrochemicals, non-ferrous metal, insurance, telecommunication, banking, wholesale, and utilities. This study uses a computable general equilibrium model of China to estimate the economic benefits from China

TERM (The Enormous Regional Model) is a "bottom-up " CGE model of Australia which treat... more TERM (The Enormous Regional Model) is a "bottom-up " CGE model of Australia which treats each region as a separate economy. TERM was created specifically to deal with highly disaggre-gated regional data while providing a quick solution to simulations. This makes it a useful tool for examining the regional impacts of shocks that may be region-specific. We include some details of how we prepared the TERM database, using a national input-output table, together with regional data showing output (for agriculture) and employment (in other sectors) for each of 144 sectors and 57 regions [the Australian statistical divisions]. Using a 38-sector, 45-region aggregation of the model, we simulate the short-run effects of the Australian drought of 2002-03, which was the most widespread for 20 years. The effects on some statistical divisions are extreme, with income losses of up to 20 per cent. Despite the relatively small share of agriculture in Australian GDP, the drought reduces GDP ...

Modern CGE models can boast considerable sectoral detail. However, it is obvious that output of (... more Modern CGE models can boast considerable sectoral detail. However, it is obvious that output of (say) electronic components, must be quite heterogeneous. Hence, since Leontief, multisectoral models tend to measure quantities not in physical units but in effective economic units (usually initial-dollars-worth). The CET functional form, close cousin to CES, is used to allocate a fixed resource between alternate uses; for example land between crops, or workers between sectors. It works well when both input and output quantities are measured in initial-dollars-worth, such as land rental values. Because CET chooses a crop mix to maximize revenue, it is welfare-neutral -- a small change in land allocation will not affect land's contribution to GDP. This is a desirable property. But CET translates poorly into physical units: we typically find that if percent changes in (effective) land use are interpreted as percent changes in crop areas, then total land area is not fixed. This can be ...

Given that the General Equilibrium (GE) models such as GTAP are highly aggregated, it is difficul... more Given that the General Equilibrium (GE) models such as GTAP are highly aggregated, it is difficult to capture the tariff and trade-flow variations at disaggregate levels in these models. On the other hand, Partial Equilibrium (PE) models, which can be used for analysis at disaggregate levels, deprive the researcher of the benefits of an economy-wide analysis, which are crucial to examine trade policy impacts. Therefore, a CGE framework that is nested with a Partial Equilibrium model is an ideal tool to carry out trade policy analysis at disaggregated levels. We develop a Partial Equilibrium model in this paper, using some CET and CES nests, market clearing conditions and price linkages and nest it within the standard GTAP model, calling it a PE-GE model. The primary advantage of this new work is that it is undertaken in conjunction with the standard GTAP model, thereby making it readily available to users of that model, along with all of the decomposition tools that have been develo...