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How Would Global Trade Liberalization Affect Rural and Regional Incomes in Australia?

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Author Info

  • Kym Anderson

    ()
    (School of Economics, University of Adelaide)

  • James Giesecke

    ()
    (Monash University)

  • Ernesto Valenzuela

    ()
    (School of Economics, University of Adelaide)

Abstract

Agricultural protection in rich countries, which had depressed Australian farm incomes via its impact on AustraliaÂ’s terms of trade, has diminished over the past two decades. So too has agricultural export taxation in poor countries, which has had the opposite impact on those terms of trade. Meanwhile, however, import protection for developing country farmers has been steadily growing. To what extent are Australian farmers and rural regions still adversely affected by farm and non-farm price- and trade-distortive policies abroad? This paper draws on new estimates of the current extent of those domestic and foreign distortions first to model their net impact on AustraliaÂ’s terms of trade (using the World BankÂ’s Linkage model of the global economy), and second to model the effects of that terms of trade impact on output and real incomes in rural vs urban and other regions and households within Australia as of 2004 (using MonashÂ’s multi-regional TERM model of the Australian economy).

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File URL: http://www.adelaide.edu.au/cies/papers/Discussion_Paper1002.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2010-02.

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Length: 33 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:adl:cieswp:2010-02

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Keywords: Trade liberalisation; rural income; regional CGE modeling;

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  1. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications, The World Bank, number 9436, February.
  2. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2008. "Distortions to Agricultural Incentives in Australia and New Zealand," Agricultural Distortions Working Paper 48387, World Bank.
  3. Tyers,Rod & Anderson,Kym, 1992. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521351058.
  4. Kym Anderson & Peter Lloyd & Donald MacLaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," Centre for International Economic Studies Working Papers 2007-01, University of Adelaide, Centre for International Economic Studies.
  5. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications, The World Bank, number 2611, February.
  6. Mark Horridge & Glyn Wittwer, 2008. "Creating and managing an impossibly large CGE database that is up-to-date," Centre of Policy Studies/IMPACT Centre Working Papers g-175, Victoria University, Centre of Policy Studies/IMPACT Centre.
  7. Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper 48394, World Bank.
  8. Gardner, Bruce L., 2008. "Distortions to Agricultural Incentives in the United States and Canada," Agricultural Distortions Working Paper 48573, World Bank.
  9. van der Mensbrugghe, Dominique & Valenzuela, Ernesto & Anderson, Kym, 2009. "Border Price and Export Demand Shocks for Developing Countries from Rest-of-World Trade Liberalization Using the Linkage Model," Agricultural Distortions Working Paper 52797, World Bank.
  10. Adams, Philip D. & Dixon, Peter B. & McDonald, Daina & Meagher, G. A. & Parmenter, Brian R., 1994. "Forecasts for the Australian economy using the MONASH model," International Journal of Forecasting, Elsevier, vol. 10(4), pages 557-571, December.
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Cited by:
  1. Kym Anderson, 2009. "The Impact of Manufacturing Protection on Agricultural Incentives in Australia," Centre for International Economic Studies Working Papers 2009-04, University of Adelaide, Centre for International Economic Studies.
  2. James Andrew Giesecke, 2011. "Development of a Large-scale Single US Region CGE Model using IMPLAN Data: A Los Angeles County Example with a Productivity Shock Application," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(3), pages 331-350, April.
  3. Giesecke, James A. & Madden, John R., 2013. "Regional Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, Elsevier.

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