Empirical Evidence on Growth Spillovers from China to New Zealand
AbstractThis paper provides a quantitative analysis of the impact on New Zealand of economic growth in China through the framework of an econometric model. The analysis compares the roles of China and the US both for growth in New Zealand and also for world commodity prices, the latter being important for New Zealand as an exporter of primary products. Finally, in the light of the increasing role of China in the world economy over the last two to three decades, the paper also investigates whether spillover effects from China to New Zealand have changed over this period. Using models estimated from the mid- 1980s to 2011, we find that growth spillovers from China are important for New Zealand, with estimates of the accumulated increase in domestic GDP from a one percent increase in output growth in China being in the range of around 0.2 to 0.4 percent. It is striking that growth spillovers are substantially greater from the US than from China, despite the latter's increasing importance in the world economy. Both domestic and foreign shocks have been important drivers of real exchange rate fluctuations, while the contribution of the latter has been relatively more important. The time-varying estimates provide some evidence of time-variation, with the greatest impact from China applying for about a decade from the mid-1990s, but also being relatively large in the latter part of our sample period.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 13/17.
Length: Structural VAR, growth spillovers, commodity prices
Date of creation: Jul 2013
Date of revision:
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
C32; E32; F43; F44;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-20 (All new papers)
- NEP-CWA-2013-07-20 (Central & Western Asia)
- NEP-FDG-2013-07-20 (Financial Development & Growth)
- NEP-MAC-2013-07-20 (Macroeconomics)
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.:
- Kiyotaka Sato & Zhaoyong Zhang & Michael McAleer, 2010.
"Identifying Shocks in Regionally Integrated East Asian Economies with Structural VAR and Block Exogeneity,"
Working Papers in Economics
10/23, University of Canterbury, Department of Economics and Finance.
- Sato, Kiyotaka & Zhang, Zhaoyong & McAleer, Michael, 2011. "Identifying shocks in regionally integrated East Asian economies with structural VAR and block exogeneity," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 81(7), pages 1353-1364.
- Kiyotaka Sato & Zhaoyong Zhang & Michael McAleer, 2009. "Identifying Shocks in Regionally Integrated East Asian Economies with Structural VAR and Block Exogeneity," CIRJE F-Series CIRJE-F-694, CIRJE, Faculty of Economics, University of Tokyo.
- Sato, K. & Zhang, Z. & McAleer, M.J., 2009. "Identifying Shocks in Regionally Integrated East Asian Economies with Structural VaR and Block Exogeneity," Econometric Institute Research Papers EI 2009-49, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Sato, K. & Zhang, Z. & McAleer, M.J., 2010. "Identifying Shocks in Regionally Integrated East Asian Economies with Structural VAR and Block Exogeneity," Econometric Institute Research Papers EI 2010-09, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Tilak Abeysinghe & Gulasekaran Rajaguru, 2003.
"Quarterly Real GDP Estimates for China and ASEAN4 with a Forecast Evaluation,"
Departmental Working Papers
wp0404, National University of Singapore, Department of Economics.
- Gulasekaran Rajaguru & Tilak Abeysinghe, 2004. "Quarterly real GDP estimates for China and ASEAN4 with a forecast evaluation," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 23(6), pages 431-447.
- Jarkko Jääskelä & Penelope Smith, 2011. "Terms of Trade Shocks: What are They and What Do They Do?," RBA Research Discussion Papers rdp2011-05, Reserve Bank of Australia.
- Tamim Bayoumi & Andrew Swiston, 2009.
"Foreign Entanglements: Estimating the Source and Size of Spillovers Across Industrial Countries,"
IMF Staff Papers,
Palgrave Macmillan, vol. 56(2), pages 353-383, June.
- Tamim Bayoumi & Andrew Swiston, 2007. "Foreign Entanglements: Estimating the Source and Size of Spillovers Across Industrial Countries," IMF Working Papers 07/182, International Monetary Fund.
- Buckle, Robert A. & Kim, Kunhong & Kirkham, Heather & McLellan, Nathan & Sharma, Jarad, 2007. "A structural VAR business cycle model for a volatile small open economy," Economic Modelling, Elsevier, vol. 24(6), pages 990-1017, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Web and Publishing Team, The Treasury).
If references are entirely missing, you can add them using this form.