Modelling_Limitations_Supply Constrained_Pmodel_closure_2014

Modelling_Limitations_Supply...

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Modelling considerations & Limitations ABS (2011) Australian National Accounts: Input-Output Tables, Australian Bureau of Statistics Chapter 5 Breisinger et al. (2009) Pauw, K. and Leibbrandt, M. (2012) Minimum Wages and Household Poverty: General Equilibrium Macro–Micro Simulations for South Africa, World Development , 40(4): 771–783
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Recap Objective: Introduce basic SAM-based computational model for policy evaluation Abstract representation of inter-related system of activities in economy Economy-wide focus Useful when considering possible impacts of policy shocks Overview of data: Task 1 – SAM balancing National accounting “Underlying any economic analysis there is a set of economic accounts” Task 2 – SAMS and structure of economy
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Recap Building models Impose behavioural or technical assumptions that underlie the accounts Task 3 – Understanding circular flows imposed in models Task 4 – Fixed price SAM model Use to evaluate economy wide impact (on gross output, GDP, household income, taxes, imports) of an exogenous shock in final demand (exports, government expenditure/transfers, …) Task 5 – Introducing supply constraints
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Modelling considerations (1) 1. What activities are endogenous and what are exogenous Multipliers increase as more accounts are endogenized 2. Gross vs. Net Impacts: It’s all about the spending and who is doing/receiving the spending. Economic Leakages – When spending leaves the region : low linkages in rural areas (See paper Kashian, R. Walworth County Fair: An Economic Impact Analysis ( ) 3. Spending Realignment & Substitution Effects The “zero sum” effect: – When spending on one activity (pro sporting events) substitutes for other spending – Can account for as much as 5%-50% direct event spending. – World Cup Example 4. The Basics of Economic Impact Analysis by Saskatchewan Economic Development Association SEDA on Nov 01, 2011
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Disappointed by World Cup bookings, South African tourism looks for long-term gains, May 2010 DURBAN, South Africa — Disappointed by bookings for the World Cup, South Africa's tourism industry says benefits could accrue for years from the publicity around the world's most-watched sporting event. "At the start, we thought that 450,000 people will come, then 375,000 and even 250,000 people," said Thandiwe January- McLean, head of the country's tourism board. Smaller venues that depend on domestic travellers say their bookings are down as South Africans put off holidays to avoid high prices during the tournament, or stay home to watch matches in their cities. frican-tourism-looks-long
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Considerations (2) 4. Timing of the Study Temporary construction impacts Recurring impacts Operation and maintenance/repair 5. Opportunity cost Free lunch economics Costs are benefits (the more expensive the bigger the impact) Who pays? Who is crowded out?
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