Australian population futures

9780858473430Australia stands at a turning point in its demographic development. It is crucial at this time that a vision of our future population is developed that takes full account of the best scientific knowledge and policy thinking and includes the wishes and opinions of all Australians. Public debate about population and immigration in Australia has too often been dominated by interest groups and has focused on extreme positions. On the one hand are those who believe Australia should increase its population as rapidly as possible and strive to double the current population. On the other hand are some extreme environmentalists who argue for an immediate cessation of population growth. It is my argument in this chapter that both of these extreme positions would have negative consequences for Australia and most Australians. Both positions oversimplify the population issue and see population policy as a silver bullet to deliver either economic prosperity, in the case of the ‘growth at all costs’ lobby or environmental sustainability by the ‘zero growth’ lobby. However, the relationships between population and economic growth, environmental sustainability, equity and liveability are much more complex than these simplistic positions suggest. Population policies must take full account of these complexities.Graeme Hug

Opening services markets within Europe; modelling foreign establishments in a CGE framework

In services, the activities of foreign affiliates often exceed the value of cross-border trade. A complete analysis of services liberalisation therefore requires the modelling of FDI. This paper presents the treatment of FDI in our CGE model WorldScan based on the ideas of Petri (1997) and Markusen (2002). They assume that firms establishing affiliates abroad also transfer firm-specific knowledge. Consequently, capital and products differ from existing capital and products in the host country. As an illustration, we apply this model to assess the proposals of the European Commission to open up services markets. FDI in services could increase by 20% to 35%. However, the overall economic impact is limited. Our assessment suggests that GDP in the EU25 could increase up to 0.4%. These effects could be up to 0.8% higher if foreign capital also increases the overall productivity of the services sector.