IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Factor income shares, the banking sector, the exchange rate, and the New Zealand current account deficit

Listed author(s):
  • Geoff Bertram

The clean float of the New Zealand exchange rate exposes financial institutions to potentially undesired volatility of the nominal exchange rate. In the New Zealand exchange-rate adjustment process of 1998-2000 the data seem consistent with the idea that, intentionally or unintentionally, the behaviour of the overseas-owned trading banks amounted to management of the exchange rate (support for the Kiwi) during the adjustment period from 1998 to 2000. Whether this represented the exercise of market power in a coordinated fashion, or was simply a natural decentralised response to market incentives facing the banks, is not clear. The paper suggests that in the absence of large volumes of short-term credit advanced by overseas parents to their New Zealand bank affiliates, the nominal exchange rate would have been under far greater downward pressure during 1998-99, and the economy might have faced a classic financial and exchange-rate crisis in the wake of the Asian meltdown.

If 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.

File URL:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Taylor & Francis Journals in its journal New Zealand Economic Papers.

Volume (Year): 36 (2002)
Issue (Month): 2 ()
Pages: 177-198

in new window

Handle: RePEc:taf:nzecpp:v:36:y:2002:i:2:p:177-198
DOI: 10.1080/00779950209544369
Contact details of provider: Web page:

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:taf:nzecpp:v:36:y:2002:i:2:p:177-198. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.