Issue 1

This paper uses a seven-equation vector-autoregressive model of state unemployment rates and the national employment rate to undertake a numerical analysis of competitive bidding between the Australian states. It examines the possibility that a competitive bidding contest will benefit the losing as well as the winning state and investigate the effects on the other states. Gains and losses are measured in terms of unemployment rates. The broad thrust of the conclusions which the analysis yields is that it is indeed. possible for a state to gain an economic advantage, in terms of unemployment, by engaging in competitive bidding and to do so, moreover, without imposing significant economic damage on the other states, either individually or as a whole.

NICOLAAS GROENEWOLD, A.J. HAGGER

Page Number - 35

Where were the 'hot spots' for growth in Australia's space economy in the decade cade 1981 to 1991? Were these the same for population and employment? This paper identifies those regions which garnered the greatest shares of the nation's changing employment numbers in selective industry sectors. It shows how there were important spatial mismatches in these patterns of growth and decline. It emphasises that regions with declining shares of national population can still be hot spots of growth for employment in some activities.

ROBERT J. STIMSON, SHANE P. TAYLOR

Page Number - 19

The recent abandonment of the Regional Development Programme in the 1 996/97 Budget has seen Commonwealth interest in regional development come full circle in a period of just two years. The recent lndustry Commission (1996) study suggests that industry assistance policy, one of the most important instruments used by regional governments to influence economic outcomes within their jurisdictions, is inimical to both regional and national economic development. Hence , at the same time that the Commonwealth government is distancing itself from regional economic policy, the Industry Commission has raised serious doubts about the efficacy of a major instrument of regional policy at the State and local government level. This paper employs a computable general equilibrium model of an Australian regional economy to examine the efficacy of a range of regional policy instruments to see what scope may exist for a regional government to influence its own economic destiny. It concludes that the ability of regional governments to influence their economies in a positive way using conventional policy instruments may be limited.

JAMES A.D. GIESECKE, JOHN R. MADDEN

Page Number - 3

Australian agricultural commodities are often subject to significant and frequent shocks in prices. This paper provides a synthesis of modelling techniques that can be used to estimate the effects that changes in broadacre prices have on the employment and income levels of regional economies. As an example this modelling framework is app lied to the Western Australian state economy and to the regions with in it to estimate the effects of the recent GATT proposals for trade in agriculture.

ANNE M. GARNETT, PHILIP E.T. LEWIS

Page Number - 57

The performance of the South Australian economy over the past decade has suffered in comparison with the rest of Australia. Analysts have attributed this to a number of causes. These include difficulties in adjusting away from heavily protected manufacturing with tariff reform, the State Bank collapse and the relatively low growth in tourism. The State's heavy reliance on the agricultural sector during some difficult times on world markets exacerbated the problems. This paper analyses the effect that the mining boom in Western Australia had on the economic performance of the South Australian economy. Projections from a computable general equilibrium model of the South Australian and Australian economies, FEDERAL-SA, indicate that the mining boom may have accounted for a significant proportion of the net migration out of South Australia over the past decade. The investment and operational phases of one recently announced project this.

GLYN WITTWER, MELISSA BRIGHT

Page Number - 71

This paper examines the evidence presented at three recent inquiries into petrol pricing. The paper argues that, contrary to some claims, the country – metropolitan petrol price differential is both significant and potentially damaging to country economic development. The causes of this price differential are examined and the implications for country Australia of the recent ACCC recommendations for reform of this essential industry are considered.

GREG WALKER, TOM MURPHY, JOHN HICKS

Page Number - 85