The Subjective Assumptions Shaping CGE Models and Australian Economic Policy

The Subjective Assumptions Shaping CGE Models and Australian Economic Policy

Computable General Equilibrium (CGE) modelling is a central element of economic and policy debate in Australia, used for decisions ranging from tax reform to the approval of major projects. This report takes a deep dive into the surprising, little-known theoretical and design assumptions that fundamentally determine CGE model results and subsequent policy advice. Discover why CGE models often assume no money or interest rates, that inflation has no impact on the real economy, and that physical capital can be costlessly repurposed (meaning no stranded assets exist). Ultimately, the model results are 100 per cent determined by the subjective choices made by the modellers, often transforming these models into powerful tools of persuasion rather than objective analytical tools

Episoder(61)

Economics of Housing Supply: Concepts and Issues

Economics of Housing Supply: Concepts and Issues

In this episode, we dive into the nuanced economics of housing supply, challenging the common narrative that more new construction alone can solve housing affordability. Drawing on recent academic res...

16 Mai 202523min

Time Series Analysis Basics and Decomposition

Time Series Analysis Basics and Decomposition

In this episode, we explore the fundamentals of time series analysis with insights from the Australian Bureau of Statistics. Learn the difference between stock and flow series, and how data collected ...

15 Mai 202518min

A Guide to Cost-Benefit Analysis

A Guide to Cost-Benefit Analysis

In this episode, we dive into the Australian Government's latest guidance from the Office of Impact Analysis (OIA) on using cost-benefit analysis (CBA) to shape smarter, more accountable policy decisi...

15 Mai 202518min

Navigating Global Uncertainty: Economic Insights from the Westpac May 2025 Report

Navigating Global Uncertainty: Economic Insights from the Westpac May 2025 Report

In this episode, we dive into Westpac's latest analysis of global and Australian economic trends as of May 2025. We unpack the impact of US tariff policies, global market volatility, and the varied ec...

14 Mai 202513min

Housing Finance on the Slide: Q1 2025 Lending Trends in Australia

Housing Finance on the Slide: Q1 2025 Lending Trends in Australia

In this episode, we unpack the key insights from the Australian Dwelling Finance Bulletin for Q1 2025, which reveals the first major drop in dwelling finance approvals in two years. We explore the sha...

14 Mai 202511min

Tariffs, Turbulence, and Trends: April 2025 Economic Insights

Tariffs, Turbulence, and Trends: April 2025 Economic Insights

In this episode, we break down the April 2025 economic report from the New South Wales Treasury Corporation, focusing on the ripple effects of U.S. trade policies across global and Australian markets....

13 Mai 202514min

Forecasting Jobs: How Leading Indicators Predict Unemployment"

Forecasting Jobs: How Leading Indicators Predict Unemployment"

In this episode, we explore new research on how leading labor market indicators—like job advertisements, vacancies, and consumer unemployment expectations—can improve forecasts of the unemployment rat...

13 Mai 202514min

Crypto vs. Central Bank Digital Currencies: Digital Money and the Future of Finance

Crypto vs. Central Bank Digital Currencies: Digital Money and the Future of Finance

In this episode, we unpack the key differences between cryptocurrencies and Central Bank Digital Currencies (CBDCs). You'll learn how cryptocurrencies like Bitcoin operate on decentralized blockchains...

13 Mai 202518min

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