This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Calm after the Storm?: Supply-side contributions to New Zealand’s GDP volatility decline

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Robert A Buckle
David Haugh
Peter Thomson () (New Zealand Treasury)

Additional information is available for the following registered author(s):

Abstract

The variance of New Zealand’s real GDP has declined since the mid-1980s. To investigate why, this paper decomposes the variance of chain-weighted estimates of production-based real GDP growth into sector shares, sector growth rate variances and co-variances. The principal explanation for the decline in GDP volatility is a fall in the sum of sector variances driven by a decline in the Services and Manufacturing sector production growth variances. Sector co-variances have had a dominant influence on the profile of GDP volatility and this influence has not diminished. Despite marked changes in sector shares, notably increases in Services and Primary sector shares and a decrease in the share of Manufacturing, this has not been a significant factor influencing the decline in GDP volatility. We postulate that policy interventions such as “Think Big”, regulatory interventions during the early 1980s, and the introduction of GST are key explanations for the higher volatility until the mid 1980s. Cessation of these interventions, deregulation and possibly changes in inventory management methods are important reasons why GDP volatility has fallen since then.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.treasury.govt.nz/publications/research-policy/wp/2001/01-33/twp01-33.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 01/33.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 37 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:nzt:nztwps:01/33

Contact details of provider:
Postal: New Zealand Treasury, PO Box 3724, Wellington, New Zealand
Phone: +64-4-472 2733
Fax: +64-4-473 0982
Web page: http://www.treasury.govt.nz
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Geraldine Bruin).

Related research
Keywords: Volatility growth production sector shares manufacturing services primary construction.

Find related papers by JEL classification:
E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
L6 - Industrial Organization - - Industry Studies: Manufacturing

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Richard Clarida & Jordi Gali & Mark Gertler, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December. [Downloadable!] (restricted)
    Other versions:
  2. John Simon, 2001. "The Decline in Australian Output Volatility," RBA Research Discussion Papers rdp2001-01, Reserve Bank of Australia. [Downloadable!]
  3. Watson, Mark W, 1994. "Business-Cycle Durations and Postwar Stabilization of the U.S. Economy," American Economic Review, American Economic Association, vol. 84(1), pages 24-46, March. [Downloadable!] (restricted)
  4. Allsop, Christopher & Vines, David, 2000. "The Assessment: Macroeconomic Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 16(4), pages 1-32, Winter.
  5. Chang-Jin Kim & Charles R. Nelson, 1999. "Has The U.S. Economy Become More Stable? A Bayesian Approach Based On A Markov-Switching Model Of The Business Cycle," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 608-616, November. [Downloadable!] (restricted)
  6. Romer, Christina D, 1986. "Is the Stabilization of the Postwar Economy a Figment of the Data?," American Economic Review, American Economic Association, vol. 76(3), pages 314-34, June. [Downloadable!] (restricted)
  7. John B. Taylor, 2000. "Reassessing Discretionary Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 21-36, Summer. [Downloadable!] (restricted)
  8. Richard Clarida & Jordi Galí & Mark Gertler, 2000. "Monetary Policy Rules And Macroeconomic Stability: Evidence And Some Theory," The Quarterly Journal of Economics, MIT Press, vol. 115(1), pages 147-180, February. [Downloadable!] (restricted)
    Other versions:
  9. Margaret M. McConnell & Patricia C. Mosser & Gabriel Perez Quiros, 1999. "A decomposition of the increased stability of GDP growth," Current Issues in Economics and Finance, Federal Reserve Bank of New York, issue Aug. [Downloadable!]
  10. Olivier Blanchard & John Simon, 2001. "The Long and Large Decline in U.S. Output Volatility," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2001-1), pages 135-174. [Downloadable!]
  11. Glenn Otto & Graham Voss & Luke Willard, 2001. "Understanding OECD Output Correlations," RBA Research Discussion Papers rdp2001-05, Reserve Bank of Australia. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Claudia M. Buch & Joerg Doepke & Christian Pierdzioch, 2002. "Business Cycle Volatility in Germany," Kiel Working Papers 1129, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  2. Peter Mawson, 2002. "Measuring Economic Growth in New Zealand," Treasury Working Paper Series 02/14, New Zealand Treasury. [Downloadable!]
  3. Iris Claus, 2003. "Changes in New Zealand's Production Structure: An Input Output Analysis," Treasury Working Paper Series 03/01, New Zealand Treasury. [Downloadable!]
Statistics
Access and download statistics

Did you know? Citation analysis on IDEAS includes online papers that are freely accessible and whose text could be automatically analyzed, currently about 150000 papers.

This page was last updated on 2008-11-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.