Explaining a dynamic CGE simulation with a trade-focused back-of-the-envelope analysis: the effects of eCommerce on Australia
AbstractThis paper was written in honour of Peter J. Lloyd on the occasion of his retirement and celebrates his preeminence as a theorist and practitioner of the economics of international trade. Besides a surprising number of leading trade theorists, Australia has added significantly to empirical work on trade issues via applied general equilibrium models, especially the ORANI and MONASH models. This paper focuses on one intriguing new topic, namely, the welfare and other economy-wide effects of the development of eCommerce. The direct effects of eCommerce are presented to the Monash model as shocks to 14 sets of technology, preference and trade variables. The shocks were suggested in group discussions with people knowledgeable in the operation of eCommerce and drawn from the sectors most likely to be affected by it. On the conservative assumptions made about the size of the shocks, eCommerce will after about 10 years allow a sustained increase in private and public real consumption of about 3 per cent. This and other results of the MONASH simulation are explained with the help of a relatively simple and small BOTE (back-of-the-envelope) model.
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Bibliographic InfoPaper provided by Monash University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-136.
Date of creation: Dec 2002
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Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
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