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Forecasting the Economic impact of an industrial stoppage using a dynamic, computable general equilibrium model

Author

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  • Glyn Wittwer

    (Monash University)

  • Peter Dixon

Abstract

This paper demonstrates that dynamic computable general equilibrium (CGE) simulations can provide estimates of the economy-wide effects of industrial stoppages. Such estimates could be used in broad discussions of the contribution to economic welfare of improved industrial relations. They could also be used in narrowly focussed discussions, e.g. in the Australian Industrial Relations Commission in a determination under the Workplace Relations Act of the economic damage associated with a specific stoppage. An attractive feature of CGE simulation is that it can capture relevant details of particular circumstances. We illustrate this with a CGE analysis of the effects of a hypothetical stoppage in the Victorian non-residential construction industry. As explained in the paper, our simulation results reflect explicit assumptions about the nature of the industry in which the stoppage occurs, the wage adjustment process and the state of the business cycle.

Suggested Citation

  • Glyn Wittwer & Peter Dixon, 2004. "Forecasting the Economic impact of an industrial stoppage using a dynamic, computable general equilibrium model," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(1), pages 39-51, March.
    • Handle: RePEc:ozl:journl:v:7:y:2004:i:1:p:39-51
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    References listed on IDEAS

    as
    1. John J. Beggs & Bruce J. Chapman, 1987. "Declining Strike Activity in Australia 1983–85: An International Phenomenon?," The Economic Record, The Economic Society of Australia, vol. 63(4), pages 330-339, December.
    2. Philip D. Adams & Mark Horridge & Glyn Wittwer, 2003. "MMRF-GREEN: A Dynamic Multi-Regional Applied General Equilibrium Model of the Australian Economy, Based on the MMR and MONASH Models," Centre of Policy Studies/IMPACT Centre Working Papers g-140, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. James McDonald & Harry Bloch, 1999. "The Spillover Effects of Industrial Action on Firm Profitability," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(2), pages 183-200, September.
    4. Paulo Picchetti, 2002. "An Econometric Analysis of Strike Activity in the Brazilian Industrial Sector," LABOUR, CEIS, vol. 16(1), pages 177-200, March.
    5. Beggs, John J & Chapman, Bruce J, 1987. "Declining Strike Activity in Australia 1983-85: An International Phenomenon?," The Economic Record, The Economic Society of Australia, vol. 63(183), pages 330-339, December.
    6. Oecd, 2002. "Access for Business," OECD Digital Economy Papers 67, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Rodriguez, U-Primo E., 2007. "State-of-the-Art in Regional Computable General Equilibrium Modelling with a Case Study of the Philippines," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 20(1).
    2. Giesecke, James A. & Madden, John R., 2013. "Regional Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 379-475, Elsevier.
    3. L. J. Perry, 2005. "A Long-Term Perspective On Industrial Disputes In Australia: 1913–2003," Economic Papers, The Economic Society of Australia, vol. 24(3), pages 263-279, September.
    4. Peter B. Dixon & Maureen T. Rimmer, 2003. "State-level Dynamic CGE Modeling for Forecasting and Policy Analysis," Centre of Policy Studies/IMPACT Centre Working Papers ip-82, Victoria University, Centre of Policy Studies/IMPACT Centre.

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    More about this item

    Keywords

    Computable General Equilibrium Models Dispute Resolution; Strikes; Arbitration; and Mediation (collective bargaining) Labor-Management Relations; Trade Unions; and Collective Bargaining; Public Policy Macroeconomics; Consumption; Saving; Production; Employment; and Investment; Forecasting and Simulation;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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