This book provides a comprehensive account of the theoretical structures, database, computation and application of ORANI-INT. ORANI-INT is a multi-period elaboration of ORANI, a well-known computable general equilibrium model of the Australian economy.
The implications of assuming that expectations are model consistent are contrasted with those of the alternative assumption that expectations are static. A generic algorithm for solving a wide range of economic models is described in detail. The algorithm is portable because it is implemented in GEMPACK, a commercially available software package. The major application reported in the book addresses the issue whether tariff reform policies should be announced ahead of their implementation. Many of the multisectoral models used throughout the world are static. The methodology presented in the book demonstrates that such models can be easily embedded into an intertemporal framework.
Table of Contents
Introduction: Scope and Purpose: Introduction.- State of the Art.- Contributions of this Book.- Organisation of the Remainder of this Book.- An Overview of ORANI-INT: Introduction.- Nomenclature of Intertemporal Modelling.- The Structure of ORANI-INT.- Chapter Summary.- The Theoretical Structure of ORANI-INT: Introduction.- Industry Behavior.- Final Demands.- Zero Pure Profits Conditions.- Market Clearing Conditions.- Miscellaneous Equations.- Chapter Summary.- Appendices: The Log-Linear Form of the ORANI-INT Equation System; The Intertemporal Budget Constraint; Alternative Investment Specifications, The Implications of the Irreversibility Constraint of Investment; A Note on Divisia Indexes.- Solution Method: Introduction.- Alternative Solution Methods.- The ORANI-INT Solution Algorithm.- Modelling Sign Constraints.- Chapter Summary.- Generating the Control Path Solution: Introduction.- Constructing an Intertemporal Base Solution.- The Control Scenarios.- Chapter Summary.- Appendix: The ORANI-13 Database.- ORANI-INT's Simulation Properties with and without Forward-Looking Behavior: Introduction.- An Overview of the Illustrative Experiments.- Interpretation of Results.- The Benchmark Experiment.- The Full Intertemporal Experiment.- The Surprise Experiment.- Chapter Summary.- Should Tariff Reductions be Announced?: Introduction.- Simulating the Tariff Reduction Strategies.- Simulation Results.- Summary and Conclusions.- Summary and Conclusions: Introduction.- Model Development.- Applications.- An Agenda for Future Research.- Final Comments.