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The Extent and Consequences of Recent Structural Changes in the Australian Economy, 1997-2002: Results from Historical/Decomposition Simulations with MONASH

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  • James Giesecke

Abstract

The paper describes historical and decomposition simulations of the Australian economy undertaken with the MONASH model. The simulations cover the period 1996/97 to 2001/02. The paper first describes the historical simulation. In the historical simulation, many of those sectoral variables in MONASH which represent observable features of the economy are determined exogenously. This allows the model to calculate the outcomes for sectoral variables describing (typically unobservable) features of the economy's structure, such as industry production technologies and household tastes. The estimates for these structural and taste variables play a key role in explaining the observable features of the economy over the study period. To isolate the contribution of each of these structural features to observed economic outcomes, they are fed back into the model as exogenous shocks in the decomposition simulation. The decomposition simulation is then used to explain the causes of major changes in the Australian economy over the period 1996/97 - 2001/02 in terms of changes in technologies, tastes and other structural variables.

Suggested Citation

  • James Giesecke, 2004. "The Extent and Consequences of Recent Structural Changes in the Australian Economy, 1997-2002: Results from Historical/Decomposition Simulations with MONASH," Centre of Policy Studies/IMPACT Centre Working Papers g-151, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-151
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    References listed on IDEAS

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    1. Peter B. Dixon & Jayant Menon & Maureen T. Rimmer, 2000. "Changes in Technology and Preferences: A General Equilibrium Explanation of Rapid Growth in Trade," Australian Economic Papers, Wiley Blackwell, vol. 39(1), pages 33-55, March.
    2. Peter B. Dixon & Maureen T. Rimmer, 1999. "Changes in Indirect Taxes in Australia: A Dynamic General Equilibrium Analysis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(4), pages 327-348, December.
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    Cited by:

    1. Kyophilavong, Phouphet & Takamatsu, Shinya & Ko, Jong-Hwan, 2010. "The Impact of Laos’ Accession to the World Trade Organization," Conference papers 331967, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Boratyński, Jakub, 2021. "Decomposing structural decomposition: The role of changes in individual industry shares," Energy Economics, Elsevier, vol. 103(C).
    3. Philip Chindamo & Vance L. Martin, 2022. "The Dynamics of Structural Transformation in Australia, 1960–2020," The Economic Record, The Economic Society of Australia, vol. 98(322), pages 296-315, September.
    4. Peter Tulip, 2014. "The Effect of the Mining Boom on the Australian Economy," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 17-22, December.
    5. De Hoyos, Rafael E., 2005. "North-South Trade Agreements and Household Welfare: Mexico under NAFTA," Conference papers 331425, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Glyn Wittwer, 2009. "The Economic Impacts of a New Dam in South‐East Queensland," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(1), pages 12-23, March.

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    More about this item

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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