tag:blogger.com,1999:blog-5672498644411374237.post872085464527331003..comments2023-12-30T03:23:35.965+11:00Comments on Australian Observer: Resource rent tax: why GE modelling?PAUL BARRATThttp://www.blogger.com/profile/13447792285944889375noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5672498644411374237.post-40790697443864780742010-06-02T02:21:46.179+10:002010-06-02T02:21:46.179+10:00Paul, the result in the KPMG model is, as you'...Paul, the result in the KPMG model is, as you've documented, in the assumptions, not the model.Nicholas Gruenhttps://www.blogger.com/profile/08979019731787830666noreply@blogger.comtag:blogger.com,1999:blog-5672498644411374237.post-84477851948867816872010-06-01T17:04:40.729+10:002010-06-01T17:04:40.729+10:00CGA models are not assensitive to intial condition...CGA models are not assensitive to intial conditions as you make out, nor particularly prone to butterfly effects. Typically the opposite is true and they converge rapidly to an new final condition.<br /><br />They essentially take and IO model as a starting point and allow price changes and flow-on adjustments to occur. IO can tell you the initial shock, ceteris paribus, while the CGE model allows people to adjust to new price/quantity conditions. <br /><br />A large IO shock does not always imply large real impact on the economy after adjustments occur.Cameron Murrayhttps://www.blogger.com/profile/08737859133901303110noreply@blogger.com