There have been a number of computable general equilibrium (CGE) studies quantifying the economic impact of national competition policy (NCP). They typically involve long-run comparative static simulations with the most important shock being productivity improvements. These improvements are set equal to the productivity gap between relevant Australian industries and overseas counterparts (as measured by such methods as data envelopment analysis). The size of the estimated gaps and the assumption that NCP will eliminate them has been called into question. This paper develops an alternative approach that uses historical modelling with a dynamic multiregional CGE model (FEDERAL-F) to uncover changes, consistent with observed data, in the rate of productivity improvements in the utilities sector have had on the economies of Tasmania and mainland Australia, concentrating in particular on the Tasmanian results.
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Article provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).
Volume (Year): 34 (2004) Issue (Month): 1 (March) Pages: 15-35 Download reference. The following formats are available: HTML,
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