MMRF is a multiregional multisectoral model of Australia based on the single region ORANI model of the Australian economy (Adams, Horridge and Parmenter, 2000). The dimensions of the matrices are indicated by indices (s, c, m, etc.) which correspond to the sets in Table 2.1. EMERALD recognizes three sets of regions: regions of use (d), of origin (r), and of origin of margins (p) (i.e. the origin of margins services used to produce a commodity from (r) to (d) liver).
In fact, the three groups are the same: they are labeled according to the context of use. For example, the USE(c,s,u,d) matrix at the top left shows the delivered value of demand for each commodity (c in COM) whether domestic or imported (s in SRC) in each destination region (DST) for each user (user, consisting of industries, IND and the 4 end users: households, investment, government and exports). For example, pdeliverd(c,s,r,d) and xtrad(c,s,r,d) are price and quantity variables corresponding to the DELIVRD(c,s,r,d) matrix.
In Figure 2.1, the connection is made by the arrow connecting the MAKE_I matrix to the TRADE and SUPPMAR matrices. For non-margin goods, the domestic part of the TRADE matrix must add up (more than d in DST) to the corresponding element in the MAKE_I matrix of commodity stocks. This nest corresponds to the value of flow (shown in capital letters) with price, ppur_s(c,u,d) and quantity, xhou_s(c,d) variables.
Industry production functions are of the nested CES type: Leontief except for substitution between primary factors and between commodity sources.
THE CORE EQUATIONS OF THE EMERALD 1. Main sets of the EMERALD
The intermediate demand for producers, XINT(c,s,i,d), is proportional to the total composite goods demanded by industry i, substitution elasticity between domestic and imported goods, SIGMADOMIMP(c). Similarly, equation 2.1 shows that household demand for domestic and imported goods in region d, XHOU(c,s,d), is proportional to total household demand for composite goods, XHOU_S(c,d), and with a price term driven by the elasticity of substitution between domestic and imported goods, SIGMADOMIMP(c). It shows that the demand for domestic and imported goods for investors in region d, XINV(c,s,d), is proportional to the total demand for composite goods for investors, is driven by the elasticity of substitution between domestic and imported goods, SIGMADOMIMP(c).
Similar to the previous one, this nest is expressed by equation 4.1, which determines the labor demand for industry i for different occupations, XLAB(i,o,d). Finally, the import prices, PIMP(c,r), in equation 8.4, are simply determined by foreign import prices, PFIMP(c,r), multiplied by the exchange rate, PHI. S3LUX is the shares of this remainder allocated to each item - the marginal budget shares.
The household cost of living in d, WSUBSIST(d), is defined by equation 9.2 as the total per capita living expenditure spent by the number of households NHOU(d). Since WHOUTOT(d) and PHOUTOT(d) are known, total real household consumption, XHOUTOT(d) and WHOUTOT(d), are given by equation 9.6 and equation 9.7. Using the Leontief function, equation 13.1 determines that the margin demand, , ATRADMAR(c ,s,m,r,d).
Adding the total demand to margins produced in p can be expressed in two different ways: Equation 15.4 and Equation 15.5. Total demand for good c made in r = supply of good c made in r Equation 16.1 declares the total demand for good c produced in r equal to the supply of good c, s produced in r. Then the supply for margins, in p, XSUPPMAR_RD(m ,P).
DATABASE 1. Introduction
SUBSIDY VARIATIONS TO ATTRACT INVESTORS
Imports of TCF from other regions only increase by 1.7%, mainly because local demand shifts towards JaTeng TCF. Jobs are growing in TCF (by 5.9%) and in non-traded sectors, but falling in trade-exposed sectors. To attract labor from other regions, wages had to increase by 0.077% compared to capital rent by 0.015% (the latter are indexed to the investment price index).
Due to the fall in TCF prices, TCF production, exports to ROW increase by 2.78%, and exports to other regions increase by 0.75%. Again, national sectoral output follows the sum of the corresponding regional results, for example in column (3), food and beverages decrease by 0.12%. On the income side of GDP, aggregate employment decreases by 0.13% and aggregate fixed assets by 0.082%.
On the other hand, the demand for capital falls by 0.33% due to the increase in capital rent. As TCF prices increase, exports to the ROW shrink by 0.20% and exports to other regions by 0.189%. Imports from other regions fell by 0.14% as the substitution effect is not enough to prevent the contraction in demand.
Changes in export and import volume used cause the real trade balance's share of real GDP to increase by 0.001%. On the income side of GDP, total employment falls by 0.20% and total capital stock by 0.33%. As local prices fall, export volumes increase by 0.44% (mainly to ROW) and import volumes decrease by 0.065%.
Changes in exports and imports cause the weight of the real trade balance in real GDP to increase by 0.016%. Column (3), the total effect, shows that all spending (except government) expands: for example investment increases by 0.27%. Again, the import volume increases by 0.36% as a result of the expansion of production (driven by the TCF sector).
A subsidy financed by a household tax also raised JaTeng GDP (by 0.11%), but by less than the unfinanced subsidy.
DAFTAR PUSTAKA
