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An Analysis of the Implications for the Gold Mining Industry of Alternative Tax Policies: A Regional Disaggregated Model for Australia

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  • ANDREW FELTENSTEIN

Abstract

We construct a dynamic model of the Australian economy that has a regional sub‐section representing Western Australia. Within the West Australia sub‐economy, there is a separate technology for the gold mining industry. We implement the model, and simulate a 2.5 per cent tax on gold exports. The outcome shows no fiscal improvement at the national level, although the West Australian budget improves slightly. Real income falls both nationally and in West Australia as the trade balance deteriorates, and an increased real interest rur‐ causes investment to fall. We conclude that the taxation of gold exports leads to few measurable benefits.

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  • Andrew Feltenstein, 1997. "An Analysis of the Implications for the Gold Mining Industry of Alternative Tax Policies: A Regional Disaggregated Model for Australia," The Economic Record, The Economic Society of Australia, vol. 73(223), pages 305-314, December.
    • Handle: RePEc:bla:ecorec:v:73:y:1997:i:223:p:305-314
    DOI: 10.1111/j.1475-4932.1997.tb01004.x
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    References listed on IDEAS

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    1. Feltenstein, Andrew, 1986. "An intertemporal general equilibrium analysis of financial crowding out : A policy model and an application to Australia," Journal of Public Economics, Elsevier, vol. 31(1), pages 79-104, October.
    2. S. Selvanathan, 1986. "An Econometric Study of Gold Prices and Production," Economics Discussion / Working Papers 86-07, The University of Western Australia, Department of Economics.
    3. Feltenstein, Andrew, 1992. "Oil prices and rural migration: the Dutch disease goes south," Journal of International Money and Finance, Elsevier, vol. 11(3), pages 273-291, June.
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    Cited by:

    1. R.N. Ghosh & M.A.B. Siddique, 1998. "The Labour Market in the Maldives: The case for institutional reforms," Economics Discussion / Working Papers 98-13, The University of Western Australia, Department of Economics.
    2. Plassmann, Florenz & Feltenstein, Andrew, 2016. "How large do multi-region models need to be?," Journal of Policy Modeling, Elsevier, vol. 38(1), pages 138-155.
    3. Plassmann, Florenz, 2005. "The advantage of avoiding the Armington assumption in multi-region models," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 777-794, November.
    4. Selvanathan, Saroja & Selvanathan, E. A., 1999. "The effect of the price of gold on its production: a time-series analysis," Resources Policy, Elsevier, vol. 25(4), pages 265-275, December.
    5. Andrew Feltenstein & Florenz Plassmann, 2008. "The Welfare Analysis of a Free Trade Zone: Intermediate Goods and the Asian Tigers," The World Economy, Wiley Blackwell, vol. 31(7), pages 905-924, July.
    6. Y. Qiang, 1999. "An Economy-wide Model of Western Australia: The theoretical structure," Economics Discussion / Working Papers 99-06, The University of Western Australia, Department of Economics.

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