The New Zealand Business Cycle: Return To Golden Days?
The current economic expansion is one of the more enduring in New Zealand's post-war period. But is this a change from past behaviour? We examine New Zealand's post-war business cycles for the sample period 1946q1 to 2005q4, using a newly developed 60-year quarterly time series for real GDP. The non-parametric Bry and Boschan (1971) algorithm is used to derive Classical business cycle turning points, and to underpin the establishment of key cycle characteristics. The latter include cycle asymmetries, volatility, diversity and degree of duration dependence. Markov-switching models estimated by Gibbs-sampling methods (Kim and Nelson, 1999), are then used to derive mean growth rate and volatility regimes, and to draw implications. Results point to a return to a more rhythmic pattern of long expansions and short contractions, after that pattern was interrupted following the oil shocks of the 1970s and New Zealand's reforms of the mid to late 1980s and early 1990s. More rhythmic patterns should not be mistaken for a predetermined pattern, as duration test results show that cycle expansion paths do not age. This, together with the onservation that rates of growth are not dissimilar across the more sustained expansion phases, implies that in order to enhance New Zealand's prospoerity, policies are required that extend business cycle expansions without allowing the excesses that undermine those expansions to build up.
|Date of creation:||Aug 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: http://cama.crawford.anu.edu.au
More information through EDIRC
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.:
- Viv B. Hall & C. John McDermott, 2007.
"Regional business cycles in New Zealand: Do they exist? What might drive them?,"
Papers in Regional Science,
Wiley Blackwell, vol. 86(2), pages 167-191, 06.
- Viv B Hall & C. John McDermott, 2005. "Regional business cycles in New Zealand:Do they exist? What might drive them?," Urban/Regional 0509013, EconWPA.
- Viv Hall & C. John McDermott, 2004. "Regional business cycles in New Zealand: Do they exist? What might drive them?," Working Papers 04_10, Motu Economic and Public Policy Research.
- Viv. B Hall & McDermott C. John, 2004. "Regional Business Cycles in New Zealand: Do they exist? What might drive them?," ERSA conference papers ersa04p200, European Regional Science Association.
- Viv Hall & Kunhong Kim & Robert Buckle, 1998. "Pacific rim business cycle analysis: Synchronisation and volatility," New Zealand Economic Papers, Taylor & Francis Journals, vol. 32(2), pages 129-159.
- Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-84, March.
- Jonathan Ohn & Larry W. Taylor & Adrian Pagan, 2004. "Testing for duration dependence in economic cycles," Econometrics Journal, Royal Economic Society, vol. 7(2), pages 528-549, December.
- Robert A. Buckle & David Haugh & Peter Thomson, 2004. "Markov Switching Models for GDP Growth in a Small Open Economy: The New Zealand Experience," Journal of Business Cycle Measurement and Analysis, OECD Publishing,Centre for International Research on Economic Tendency Surveys, vol. 2004(2), pages 227-257.
- Marcelle Chauvet & Jeremy M. Piger, 2003.
"Identifying business cycle turning points in real time,"
Federal Reserve Bank of St. Louis, issue Mar, pages 47-61.
- Marcelle Chauvet & Jeremy Piger, 2002. "Identifying business cycle turning points in real time," FRB Atlanta Working Paper No. 2002-27, Federal Reserve Bank of Atlanta.
- Harding, Don & Pagan, Adrian, 2003. "A comparison of two business cycle dating methods," Journal of Economic Dynamics and Control, Elsevier, vol. 27(9), pages 1681-1690, July.
- Chang-Jin Kim & Charles R. Nelson, 1999. "State-Space Models with Regime Switching: Classical and Gibbs-Sampling Approaches with Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262112388, June.
- Harding, Don & Pagan, Adrian, 2003. "Rejoinder to James Hamilton," Journal of Economic Dynamics and Control, Elsevier, vol. 27(9), pages 1695-1698, July.
- Don Harding & Adrian Pagan, 2000.
"Disecting the Cycle: A Methodological Investigation,"
Econometric Society World Congress 2000 Contributed Papers
1164, Econometric Society.
- Harding, Don & Pagan, Adrian, 2002. "Dissecting the cycle: a methodological investigation," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 365-381, March.
- Harding, Don & Pagan, Adrian, 2006. "Synchronization of cycles," Journal of Econometrics, Elsevier, vol. 132(1), pages 59-79, May.
- Robert A Buckle & Kunhong Kim & Heather Kirkham & Nathan McLellan & Jared Sharma, 2002. "A structural VAR model of the New Zealand business cycle," Treasury Working Paper Series 02/26, New Zealand Treasury.
- Wells, Graeme & Evans, Lewis, 1985. "The Impact of Traded Goods Prices on the New Zealand Economy," The Economic Record, The Economic Society of Australia, vol. 61(172), pages 421-35, March.
- Hamilton, James D., 2003. "Comment on "A comparison of two business cycle dating methods"," Journal of Economic Dynamics and Control, Elsevier, vol. 27(9), pages 1691-1693, July.
- Chow, Gregory C & Lin, An-loh, 1971.
"Best Linear Unbiased Interpolation, Distribution, and Extrapolation of Time Series by Related Series,"
The Review of Economics and Statistics,
MIT Press, vol. 53(4), pages 372-75, November.
- Tom Doan, . "DISAGGREGATE: RATS procedure to implement general disaggregation (interpolation/distribution) procedure," Statistical Software Components RTS00050, Boston College Department of Economics.
- Tom Doan, . "CHOWLIN: RATS procedure to distribute a series to a higher frequency using related series," Statistical Software Components RTS00036, Boston College Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:een:camaaa:2006-21. 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: (Cama Admin)
If references are entirely missing, you can add them using this form.