1. Spatial microsimulation
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Modelling the impact of declining Australian terms of trade on the spatial distribution of income

  1. Yogi Vidyattama  Is a corresponding author
  2. Maheshwar Rao  Is a corresponding author
  3. Itismita Mohanty  Is a corresponding author
  4. Robert Tanton  Is a corresponding author
  1. Institute for Governance and Policy Analysis, University of Canberra, Australia
  2. University of Canberra, Australia
Research article
Volume 7(1) Spring 2014
Cite this article as: Y. Vidyattama, M. Rao, I. Mohanty, R. Tanton; 2014; Modelling the impact of declining Australian terms of trade on the spatial distribution of income; International Journal of Microsimulation; 7(1); 100-126. doi: 10.34196/ijm.00095
6 figures and 5 tables

Figures

Figure 1
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Movements in Australian terms of trade.

Source: ABS.

Figure 2
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The modelling framework.
Figure 3
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Spatial impact on incomes of a change in terms of trade.
Figure 4
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Spatial reduction in tax paid as a result of a change in terms of trade.
Figure 5
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Spatial impact on government transfer payments as a result of a change in terms of trade.
Figure 6
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Spatial impact on disposable income as a result of a change in terms of trade.

Tables

Table 1
Employment simulation benchmark tables.
Number Benchmark
1 Number of Persons aged 15+
2 Occupation of Reference Person by Industry of employment
3 Occupation of Spouse by Industry of employment
4 Age of Reference person by Age of Spouse by family type
5 Non School Qualification (reference person and Spouse) and Number of Dependents

  1. Source: ABS Census of Population and Housing, 2011.

Table 2
Census benchmark tables to generate dataset for small areas.
Number Benchmark
1 Age by sex by labour force status
2 Non-school qualification
3 Industry and Occupation
4 Household type
5 Number of persons usually resident in household
6 Tenure type by weekly household income
7 Dwelling structure by household family composition

  1. Source: ABS Census of Population and Housing, 2011.

Table 3
Policy simulation: A terms of trade decline of 22.6 percent (5% pa) over the 5 years from 2011–12 to 2016–17 – the percentage deviations in macro variables from the baseline forecasts.
Macro variables Deviations from forecast values
1 Real GDP −0.64
2 Real GNE −2.38
3 Real GNP −3.66
4 Total factor productivity 0.00
5 Average Propensity to Consume 0.00
6 Real private consumption −2.33
7 Real public consumption −2.33
8 Real investment −2.56
9 Real exports 2.65
10 Real imports −8.06
11 Employment (hours weighted) 0.00
12 Employment (wage weighted) 0.07
13 Capital Stocks −2.29
14 Real wage −8.93
15 Nominal exchange rate 30.23
16 Real exchange rate −37.91
17 Terms of trade −22.60
18 Consumer price index 0.00
19 Price deflator for GDP −5.52
20 Price deflator for investment −0.40
21 Price deflator for consumption −1.37
22 Change in the ratio of balance of trade to GDP 0.03
23 Change in the ratio of net foreign liabilities to GDP −0.69
Table 4
Movements in sectoral output and employment.
Sector Input (1) Employment (2) Wage rates (3)
1 Agriculture, Fisheries & Forestry 1.88 3.40 −1.32
2 Mining 4.13 7.25 −7.31
3 Manufacturing 2.71 4.47 −5.84
4 Electricity, Gas & Water −0.30 1.89 −8.59
5 Construction −2.20 −1.76 −10.75
6 Wholesale Trade −2.40 −1.86 −8.93
7 Retail Trade −3.00 −2.35 −11.69
8 Accommodation, Cafes & Restaurants −0.01 0.78 −9.83
9 Transport & Storage 0.26 0.99 −8.09
10 Communication Services −1.00 1.01 −8.95
11 Finance & Insurance −0.28 0.73 −7.46
12 Property & Business Services −0.59 1.66 −8.50
13 Professional Science & Technical Services −1.09 −0.83 −8.01
14 Administrative & Support Services −0.50 0.63 −8.24
15 Public Administration −2.14 −1.69 −8.72
16 Education −0.10 0.15 −9.27
17 Health & Social Services −0.82 −0.68 −11.56
18 Arts & Recreation −1.22 −0.58 −9.73
19 Other Services −1.04 −0.35 −9.65
20 Agriculture, Fisheries & Forestry 1.88 3.40 −1.32
21 Mining 4.13 7.25 −7.31
22 Manufacturing 2.71 4.47 −5.84
23 Electricity, Gas & Water −0.30 1.89 −8.59
Table 5
National effects from the CGE and microsimulation models.
Employment effect (%) Income effect (%) Total effect (%)
Private Income 0.15 −8.10 −7.95
Tax paid 0.12 −13.47 −13.35
Government transfer −0.21 1.98 1.77
Disposable Income 0.11 −5.49 −5.38

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