Forestry and wood-based industries in the Australian economy: A computable general equilibrium analysis

Abstract

Summary The ORANI model of the Australian economy is used to quantify the short-run impact of a range of economic changes on the forestry and wood-based industries. The following economic changes are scrutinised: increased costs in the Forestry and Logging, Sawmill Products (including woodchips), and Pulp, Paper and Paperboard industries; increased afforestation; higher woodchip exports; higher real labour costs to employers; and an expansion in real absorption (ie, the real sum of household consumption, private investment and government expenditure). Industry-specific policies are revealed to have relatively small macro-economic effects when contrasted with the projection of economy-wide labour cost and demand increases. The major finding is that indirect general equilibrium effects can be significant, especially those pertaining to Australia's international competitiveness. Most previous inter-industry studies of economic impacts on the forestry and wood-based industries have used more restrictive model...