IDEAS home Printed from https://ideas.repec.org/p/cop/wpaper/g-253.html
   My bibliography  Save this paper

Superannuation within a financial CGE model of the Australian economy

Author

Listed:
  • Peter B. Dixon
  • James. A. Giesecke
  • Maureen T. Rimmer

Abstract

Australia's superannuation sector has become both a major institution in guiding the allocation of the nation's financial capital across asset classes, regions, and sectors, and a central intermediary in channelling the nation's annual savings into domestic capital formation and foreign financial asset accumulation. To put the industry's scale in context, in 2012 the sector had assets under management of approximately $1.4tn (Australia's GDP in the same year was approximately $1.5tn). Annual inflows to the system represent approximately one third of gross national savings. The sector's influence over the allocation of the nation's physical and financial assets continues to grow. We model this important institution within an economy-wide setting by embedding explicit modelling of the sector within a model of the financial sector which is in turn linked to a dynamic multi-sectoral CGE model of the real side of the economy. We develop the financial CGE model by building on a multi-sectoral dynamic model of the real side of the Australian economy. In particular, we introduce explicit treatment of: (i) financial intermediaries and the agents with which they transact; (ii) financial instruments describing assets and liabilities; (iii) the financial flows related to these instruments; (iv) rates of return on individual assets and liabilities; and (v) links between the real and monetary sides of the economy. We explore the effects of the superannuation sector by simulating a one percentage point increase in the ratio of superannuation contributions to the economy-wide nominal wage bill.

Suggested Citation

  • Peter B. Dixon & James. A. Giesecke & Maureen T. Rimmer, 2015. "Superannuation within a financial CGE model of the Australian economy," Centre of Policy Studies/IMPACT Centre Working Papers g-253, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-253
    as

    Download full text from publisher

    File URL: https://www.copsmodels.com/ftp/workpapr/g-253.pdf
    File Function: Initial version, 2015-07
    Download Restriction: no
    File URL: https://www.copsmodels.com/elecpapr/g-253.htm
    File Function: Local abstract: may link to additional material.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Janine M. Dixon & Peter B. Dixon & James A. Giesecke & Maureen T. Rimmer, 2014. "Quantifying “Dog Days”," Economic Papers, The Economic Society of Australia, vol. 33(3), pages 203-219, September.
    2. Ellis Connolly, 2007. "The Effect of the Australian Superannuation Guarantee on Household Saving Behaviour," RBA Research Discussion Papers rdp2007-08, Reserve Bank of Australia.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John Freebairn, 2018. "Opportunities and Challenges for CGE Models in Analysing Taxation," Economic Papers, The Economic Society of Australia, vol. 37(1), pages 17-29, March.
    2. Giesecke, James & Dixon, Peter & Rimmer, Maureen, 2016. "The costs and benefits of financial regulation: A financial CGE assessment of the impact of a rise in commercial bank capital adequacy ratios," Conference papers 332731, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Nassios, Jason & Giesecke, James & Dixon, Peter & Rimmer, Maureen, 2017. "Comparing the impacts of financial regulation in Australia and the United States using country-specific financial CGE models," Conference papers 332891, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Nassios, Jason & Giesecke, James A. & Dixon, Peter B. & Rimmer, Maureen T., 2019. "Mandated superannuation contributions and the structure of the financial sector in Australia," Journal of Policy Modeling, Elsevier, vol. 41(5), pages 859-881.
    5. Esmedekh Lkhanaajav, 2016. "CoPS-style CGE modelling and analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-264, Victoria University, Centre of Policy Studies/IMPACT Centre.
    6. Garaffa, Rafael & Gurgel, Angelo & Cunha, Bruno & Lucena, Andre & Szklo, Alexandre & Schaeffer, Roberto & Rochedo, Pedro, 2018. "Climate finance under a CGE framework: decoupling financial flows in GTAP database," Conference papers 332939, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Nassios, J. & Waschik, Robert & Dixon, P.B. & Rimmer, M., 2020. "Evaluating the impact of automation in long-haul trucking in the United States using USAGE-Hwy," Conference papers 333205, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Jason Nassios & James A. Giesecke & Peter B. Dixon & Maureen T. Rimmer, 2016. "Superannuation and Macroeconomic Growth and Stability," Centre of Policy Studies/IMPACT Centre Working Papers g-267, Victoria University, Centre of Policy Studies/IMPACT Centre.
    9. J.M. Dixon & J. Nassios, 2016. "Modelling the Impacts of a Cut to Company Tax in Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-260, Victoria University, Centre of Policy Studies/IMPACT Centre.
    10. Jason Nassios & James A. Giesecke & Peter B. Dixon & Maureen T. Rimmer, 2016. "A modelling framework for analysing the role of superannuation in Australia's financial system," Centre of Policy Studies/IMPACT Centre Working Papers g-266, Victoria University, Centre of Policy Studies/IMPACT Centre.
    11. Jason N. Harris & Jason Nassios & James A. Giesecke, 2017. "Determining agent-specific rates of return in a Financial CGE model of Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-270, Victoria University, Centre of Policy Studies/IMPACT Centre.
    12. James A. Giesecke & Peter B. Dixon & Maureen T. Rimmer, 2016. "The Economy-wide Impact of a Rise in Commercial Bank Capital Adequacy Ratios," Centre of Policy Studies/IMPACT Centre Working Papers g-261, Victoria University, Centre of Policy Studies/IMPACT Centre.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ross Guest, 2010. "Policy Forum: Saving for Retirement: Policy Options to Increase Retirement Saving in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 293-301, September.
    2. George Kudrna & Alan D. Woodland, 2013. "Macroeconomic and Welfare Effects of the 2010 Changes to Mandatory Superannuation," The Economic Record, The Economic Society of Australia, vol. 89(287), pages 445-468, December.
    3. Janine Dixon, 2016. "Workforce Adaptation to the Cessation of Motor Vehicle Manufacturing in Australia," Economic Papers, The Economic Society of Australia, vol. 35(4), pages 301-315, December.
    4. Gordon Menzies & Peter Dixon & Maureen Rimmer, 2016. "In Praise of (Some) Red Tape: A New Approach to Regulation," The Economic Record, The Economic Society of Australia, vol. 92(299), pages 631-647, December.
    5. Whelan, Stephen & Atalay, Kadir & Hayward, Richard Donald, 2018. "Asset portfolio retirement decisions: the role of the tax and transfer system," SocArXiv akj8w, Center for Open Science.
    6. Marc Jim M. Mariano & James A. Giesecke, 2016. "Forecasting development outcomes under alternative surplus labour assumptions," Applied Economics, Taylor & Francis Journals, vol. 48(42), pages 4019-4032, September.
    7. Amy Beech & Rosetta Dollman & Richard Finlay & Gianni La Cava, 2014. "The Distribution of Household Spending in Australia," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 13-22, March.
    8. Akshay Shanker & Sacha Vidler, 2014. "Offsets to compulsory superannuation: do people consciously choose their level of retirement saving?," CAMA Working Papers 2014-65, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    9. Andrew Leigh, 2015. "How behavioural economics does and can shape public policy," The Economic and Labour Relations Review, , vol. 26(2), pages 339-346, June.
    10. David Law & Lisa Meehan & Grant M Scobie, 2011. "KiwiSaver: An Initial Evaluation of the Impact on Retirement Saving," Treasury Working Paper Series 11/04, New Zealand Treasury.
    11. Dodo J. Thampapillai & Yvonne Jie Chen & Christopher Ivo Bacani & Omer Baris, 2016. "New Estimates of Factor Income Shares in Central Asian Economies," Economic Papers, The Economic Society of Australia, vol. 35(3), pages 282-291, September.

    More about this item

    Keywords

    Financial CGE model; superannuation;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-253. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Horridge (email available below). General contact details of provider: https://edirc.repec.org/data/cpmonau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.