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Modelling Economy-wide Effects of Future Automotive Assistance

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  • Productivity Commission
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    Abstract

    The Commission’s modelling indicates that there would be economy–wide benefits from further reductions in assistance to the automotive sector, particularly for tariffs. It also suggests that the benefits would be larger under the current assistance reduction program than options entailing lesser reductions. The model projected potential net benefits to the community of some $0.5 billion a year under this program, with gains to consumers and other industries outweighing negative impacts on the automotive industry. Modelling also confirms that a significant further appreciation of Australia’s currency, associated with the mining boom, would have a much greater impact on the automotive industry than scheduled tariff reductions. In the Commission’s assessment, these conclusions are not materially affected by consideration of factors, such as adjustment costs and scale economies, not captured directly by the model.

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    File URL: http://www.pc.gov.au/__data/assets/pdf_file/0008/80765/automodelling.pdf
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    File URL: http://www.pc.gov.au/projects/study/automodelling/finalreport
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    Bibliographic Info

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    This book is provided by Productivity Commission, Government of Australia in its series Research Reports with number 30 and published in 2008.

    ISBN: 978-1-74037-255-8
    Handle: RePEc:ris:prodcs:30

    Note: 150 pages
    Contact details of provider:
    Postal: Level 28, 35 Collins St, Melbourne Victoria 3000
    Phone: 61 3 9653 2100
    Fax: 61 3 9653 2199
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    Web page: http://www.pc.gov.au/
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    Related research

    Keywords: car industry; automotive industry; industry assistance; tariffs; competition; exports;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Mark Horridge & John Madden & Glyn Wittwer, 2003. "Using a highly disaggregated multi-regional single-country model to analyse the impacts of the 2002-03 drought on Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-141, Victoria University, Centre of Policy Studies/IMPACT Centre.
    2. Dixon, Peter B, 1978. "Economies of Scale, Commodity Disaggregation and the Costs of Protection," Australian Economic Papers, Wiley Blackwell, vol. 17(30), pages 63-80, June.
    3. Kaludura Abayasiri-Silva & Mark Horridge, 1996. "Economies of Scale and Imperfect Competition in an Applied General Equilibrium Model of the Australian Economy," Centre of Policy Studies/IMPACT Centre Working Papers op-84, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Snape, Richard H, 1977. "Trade Policy in the Presence of Economies of Scale and Product Variety," The Economic Record, The Economic Society of Australia, vol. 53(144), pages 525-34, December.
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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.

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