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Changes in Technology and Preferences: A General Equilibrium Explanation of Rapid Growth in Trade

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  • Dixon, Peter B
  • Menon, Jayant
  • Rimmer, Maureen T

Abstract

We use a computable general equilibrium model in an explanation of the recent rapid growth in Australia's trade, particularly intra-industry trade. Relative to previous studies of trade growth based on multiple regression analysis, our approach allows us to: (i) work at a detailed industry level; (ii) use primary variables to represent changes in technology and preferences rather than proxies; and (iii) use a framework based on explicit microeconomic foundations. We find that most of the growth in Australia's trade relative to GDP is explained by changes in technology and preferences. Copyright 2000 by Blackwell Publishers Ltd/University of Adelaide and Flinders University of South Australia

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Australian Economic Papers.

Volume (Year): 39 (2000)
Issue (Month): 1 (March)
Pages: 33-55

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Handle: RePEc:bla:ausecp:v:39:y:2000:i:1:p:33-55

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0004-900X

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Cited by:
  1. Dixon, Peter B. & Rimmer, Maureen T., 2013. "Validation in Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, Elsevier.
  2. Kym Anderson, 2005. "Setting the trade policy agenda: what roles for economists?," Centre for International Economic Studies Working Papers 2005-13, University of Adelaide, Centre for International Economic Studies.
  3. Craig de Laine & Patrick Laplagne & Susan Stone, 2001. "The increasing demand for skilled workers in Australia: the role of technical change," Labor and Demography 0105005, EconWPA.
  4. Adams, Philip D. & Parmenter, Brian R., 2013. "Computable General Equilibrium Modeling of Environmental Issues in Australia," Handbook of Computable General Equilibrium Modeling, Elsevier.
  5. Mai, Yin Hua & Adams, Philip & Dixon, Peter & Menon, Jayant, 2010. "The Awakening Chinese Economy: Macro and Terms of Trade Impacts on 10 Major Asia-Pacific Countries," Working Papers on Regional Economic Integration 66, Asian Development Bank.
  6. James Giesecke, 2004. "The Extent and Consequences of Recent Structural Changes in the Australian Economy, 1997-2002: Results from Historical/Decomposition Simulations with MONASH," Centre of Policy Studies/IMPACT Centre Working Papers g-151, Victoria University, Centre of Policy Studies/IMPACT Centre.
  7. Dixon, Peter B. & Koopman, Robert B. & Rimmer, Maureen T., 2013. "The MONASH Style of Computable General Equilibrium Modeling: A Framework for Practical Policy Analysis," Handbook of Computable General Equilibrium Modeling, Elsevier.
  8. Peter B. Dixon & Maureen T. Rimmer, 2009. "Forecasting with a CGE model: does it work?," Centre of Policy Studies/IMPACT Centre Working Papers g-197, Victoria University, Centre of Policy Studies/IMPACT Centre.

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