Changes in Indirect Taxes in Australia: A Dynamic General Equilibrium Analysis

Over the last thirty years, the effects of indirect taxation changes have been analysed using comparative static general equilibrium models. We use a new method to analyse current changes in Australia's indirect taxes: dynamic computable general equilibrium modelling. Comparative static methods compare the situation in a given year (usually unspecified) with and without a policy change. The dynamic method shows the effects of a policy change through time. Comparative static methods are usually restricted to estimates of long-run changes in allocative efficiency. The dynamic method provides information not only on efficiency but also on adjustment processes, including variations in employment. With our dynamic method, the effects of policy changes are analysed as deviations from explicit forecasts. We find that these forecasts are important for the policy results. For Australia's current set of indirect tax changes, our main conclusions are (i) the short-run employment effects depend critically on the wage response; (ii) merchandise exporters benefit but tourism is harmed; and (iii) the long-run welfare effectsare likely to be negative, reflecting a decline in the terms of trade and increased compliance costs.     

Transforming the NHS: what chance for the new government?

This paper reviews Labour's record on the NHS since the 1997 general election. The record shows increased financial investment especially since 2002, coupled with a marked centralisation of strategy and management which is proving counter-productive to further modernisation.     

Business Ethics on the Internet: 2

In a previous article the authors provided an introduction to using the internet as a resource for business ethics. In this sequel they look at newsgroups and chatrooms, and conclude by looking at the websites of Shell and a Shell critic on the controversial ethical aspects of its corporate policy and behaviour. Ben Fairweather is a Research Fellow, and Steve Dixon is Webmaster, at the Centre for Computing and Social Responsibility, De Montfort University, The Gateway, Leicester LEl 9BH, England (email: ccsr@dmu.ac.uk) (website http://www.ccsr.cms.dmu.ac.uk/).     

African-oriented and Euro-American-oriented world views: Research methodologies and economics

Conclusion This paper has shown two things. First, it has indicated some of the philosophical ways in which a “pure” African-oriented world view differs in kind from the “pure” Euro-American-oriented one. Second, it has set forth some of their respective differences in research methodology, primarily focusing on the area of economics. However, neither of these world views and, therefore, their research methodologies have absolute validity. Each can claim validity only under its respective limiting conditions. In the words of Kuhn, “truth may, like proof, be a term with only intra-theoretic applications.” In effect, no interworld view comparison can or should be made in terms of absolute correspondence to reality. However, overseas Africans in America do embody both world views in varying degrees. Researchers on black people, therefore, must be familiar with both methodologies in order to analyze completely the behavior of Afro-Americans.     

Changes in Technology and Preferences: A General Equilibrium Explanation of Rapid Growth in Trade

We use a computable general equilibrium model in an explanation of the recent rapid growth in Australia's trade, particularly intra-industry trade. Relative to previous studies of trade growth based on multiple regression analysis, our approach allows us to: (i) work at a detailed industry level; (ii) use primary variables to represent changes in technology and preferences rather than proxies; and (iii) use a framework based on explicit microeconomic foundations. We find that most of the growth in Australia's trade relative to GDP is explained by changes in technology and preferences.     

The Government/Democrats' package of changes in indirect taxes

Australia is faced with a comprehensive package of changes to its indirect tax system, including the introduction of a GST. The Government's only quantitative analysis in formulating the package employed PRISMOD, an archaic input-output price model. PRISMOD sheds dim light on a very limited range of policy-relevant variables. This article explains how PRISMOD works; this is of continuing relevance because PRISMOD results are a benchmark in negotiations concerning the price effects of the tax package. Then an assessment of the package is made using MONASH, a comprehensive dynamic general equilibrium model. Overall, the conclusions are negative: the package is welfare-reducing and unnecessary.