A pilot optimisation model for the 1972/73 N.D.C. plan

Abstract

This paper represents a further stage in the programme of work initiated at Lincoln some years ago under the general heading of Studies in the Structure of the New Zealand Economy, This has involved the compilation of data for a 16 sector input output matrix of the economy (now being increased to 26 sectors); the use of the data for a projection model of the economy which was adapted for use by the N. D. C.; and now the beginnings of the adaptation of the model for examining the optimal rather than the projected structure of the economy in the future. As the title infers, this paper is concerned only with a pilot model which we have developed and tested pilot because we have collapsed the economy down to five producing sectors and examined only the simplest of alternative policies. The pilot model was developed as a prelude to and a pretest of, a much bigger and more complex model on which we are now working. Our main concern here is therefore not to produce numerical answers but to explain the methodology of linear programming applied to our economy wide planning model and to invite comment and criticism of the approach we have adopted. As a starting point we refer back to the earlier work, related to the National Development Conference and first presented to this Association's Conference in 1968 and subsequently published as The Shape of the Economy in 1979 [Philpott & Ross (1)].