A Critique of Computable General Equilibrium Models for Trade Policy Analysis

The paper will deal in turn with three sets of modelling issues: the question of 'data'; the 'micro' problem of specifying market behaviour, and the. 'macro' issue of 'closing' the models in aggregate. I will conclude with some suggestions for future research. The basic theme of the paper is this: CGE modelling is essentially a conservative or 'neoclassical' scientific endeavour, and exhibits the strengths and weaknesses of neoclassicism. And as for the recent injection of apparently nonneoclassical imperfect competition or industrial organization (IO) concepts into CGE, though, as an 10 specialist myself I certainly welcome this in principle, I have doubts about the usefulness of the practice.International Relations/Trade,

Pricing and Competition in Australasian Air Travel Markets

The paper analyses more than ten thousand observations on prices charged for air travel on 1001 flights on eight New Zealand and twenty one trans-Tasman flights observed in 2004 and 2005. The main findings are (i) that routes on which Qantas competes with Air New Zealand tend to have air fares around 20% lower than routes served only by Air NZ; (ii) Emirates and Pacific Blue offer much lower fares across the Tasman but yet cannot achieve substantial markets share implying that (iii) these airlines do not offer much competitive constraint on the pricing of the larger carriers so that (iv) elimination of independent competition between Air NZ and Qantas would be likely to result in air fare increases

Employment in New Zealand

Explaining post-war employment and unemployment in New Zealand is problematic for neoclassical economic theory. Up until the late 1970s the economy was overlaid with controls and 'rigidities' of many sorts, interfering with the operation of ‘free' market forces. Yet it delivered virtually zero unemployment without being unusually prone to inflationary pressures. From the 1980s onwards, our economy has been subjected to a remarkable regime of policy 'reform', involving the opening up of markets to overseas competition, the dismantling or emasculating of centralised and/or collectivist institutions, and the adoption of an extreme version of monetarist ideology. Yet throughout these years of actions aimed at fostering ‘free markets', the actual macroeconomic performance of the markets, measured by the mismatch between supply and demand in the labour market (unemployment) has persistently deteriorated, with unemployment rates rising from less than half of one percent as late as 1977 to above 10% in the early 1990s. That is, the more market-oriented we became, the worse the markets performed. How can this be? The research program on which the present paper is a progress report tests hypotheses that can explain how both Keynesian and monetarist orthodoxies miss important aspects of New Zealand reality, and develops a model based on empathy between supply and demand sides of the labour market that is consistent with non-inflationary over-full employment

Competition Policy for the Trans-Tasman Air Travel Market: the 2005 ACT Decision and its Implications

Qantas and Air New Zealand are seeking regulatory authorisation for a Tasman Networks Agreement that would in effect cartelise their trans-Tasman operations. They cite in support Reasons given by the Australian Competition Tribunal in its authorisation of their previous application to form a 'Strategic Alliance'. The ACT determined that a cartel-like arrangement between these airlines would not substantially lessen competition across the Tasman because of competition from Pacific Blue and Emirates despite the latter's very small current market share on these routes. This paper examines the ACT's reasons and finds them lacking in economic logic as well as being inconsistent with the facts of airline market competition in Australasia. The paper suggests that the ACT is not an appropriate forum for hearing civil matters such as this and proposes an alternative process based rather on the present procedures adopted by the competition commissions of Australia and New Zealan

A mathematical model of the tetrapyrrole biosynthesis pathway

The tetrapyrrole biosynthesis pathway is a key part in chlorophyll production and is essential for plant survival. It involves numerous interacting compounds and, crucially, light. The understanding of the complex regulation processes involved has been the focus of extensive experimental research providing a large source of data. A particular set of data, concerned with the modelling described in this report, involves 24 hour timecourse data from seedlings exposed to constant light, following a three day period of growth from seed in darkness. This data includes the levels of key components such as chlorophyll, ATP, chlorophyllide and proto-chlorophyllide. Amongst the questions posed in the study-group were: i) Can the timecourse data be predicted by a model? ii) Can it predict the dierences in levels of various components in found mutant strains. To address these questions, we present in this report a model consisting of a coupled system of nonlinear ODEs that describes a simplied version of the tetrapyrrole pathway based on mass action laws. Model simulations produced results that agree qualitatively well with most, but not all, of the available timecourse data obtained from wild-type and mutant strains. Nearly all of the model's parameters are not known, so the values used in these simulations are based on estimates of the relative timescales of the reactions. An attempt at improving these estimates using data tting techniques is also discussed

Distribution, efficiency and market power : a study of the U.K. manufacturing sector, 1954-1973

The Thesis is an investigation into the relationship between market structure and profitability. First, existing oligopoly and entry-threat theories are examined and found not to provide a plausible basis for a durable structure-profitability link. Then an alternative model is set up, based on bargaining concepts. This model is successfully tested with data on UK manufacturing industries from five Censuses of Production between 1954 and 1973. Market power is found to be responsible for durable monopoly profits. Finally, an analysis is undertaken, following Salter, of rates of change of some dimensions of market performance, and the implications outlined for policy and economic welfare of these and the previous results

Flying High? Pricing and Competition in the NZ and Tasman Air Travel Market

Professor Tim Hazledine presented Flying High? Pricing and Competition in the NZ and Tasman Air Travel Market at an ISCR seminar on 1 June 2005

Pricing and Competition in Australasian Air Travel Markets

The paper analyses more than ten thousand observations on prices charged for air travel on 1001 flights on eight New Zealand and twenty one trans-Tasman flights observed in 2004 and 2005. The main findings are (i) that routes on which Qantas competes with Air New Zealand tend to have air fares around 20% lower than routes served only by Air NZ; (ii) Emirates and Pacific Blue offer much lower fares across the Tasman but yet cannot achieve substantial markets share implying that (iii) these airlines do not offer much competitive constraint on the pricing of the larger carriers so that (iv) elimination of independent competition between Air NZ and Qantas would be likely to result in air fare increases