ABSTRACT
The Australian Parliamentary Hansard of 3 May 1983 records a short question without notice by the Leader of the Opposition to the Prime Minister. Mr Peacock asked:‘… what would be the effect on the level of unemployment of a 3 to 4 per cent wage increase this year?’ This chapter examines one way in which an answer might be provided to Mr Peacock’s question (broadened perhaps to encompass the effects on the inflation rate and employment as well as unemployment), namely by recourse to any one of the five major macroeconometric models of the Australian economy currently available. These models are the Commonwealth Treasury’s NIF model, the Reverse Bank’s RBII family, the IMPACT Project’s ORANI model, the IMP model from the Institute of Applied Economic and Social Research at the University of Melbourne and NEVILE, the modelling product of Professor John Nevile. This chapter is a companion to Challen (1983), which includes background material that will be of interest to readers unfamiliar with the Australian modelling scene. A more detailed discussion of model specification issues than is possible within the present space constraints is also provided there.
