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Economic and Fiscal Impacts of Mega Sporting Events: A General Equilibrium Assessment

PFM, Vol. 6 No. 3, (2006)

This article employs a multiregional CGE model to examine the effects of a mega sporting event, the Sydney 2000 summer Olympics, on economic and financial variables within a single analytical framework. Simulations are conducted for three phases over a 12-year period. Careful attention is paid to the presence of constraints on labour supply and capital and on the sources of savings funding Olympic investments. Simulations are conducted under the assumption that no effects from the Games remain on the debt position of Australian governments or the nation’s external debt five years after the Sydney Games. The results indicate that provided there is not too large a financial loss on the Games, inclusive of construction costs, that a modest positive impact on the state hosting the Games can occur. The degree to which this positive impact comes at the expense of other states depends crucially on assumed labour-market conditions.

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