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An Empirical Study of Sectoral-Level Capital Investments in New Zealand


  • Razzak, Weshah


I extend the Glick and Rogoff (1995) aggregate time-series, empirical, intertemporal model of country-investment (and the current account) to a sectoral-level, and estimate it for New Zealand. I fit the model to panel data of eleven industries from 1988-2009. The sectoral-level investment growth is a function of lagged investment level, sector-specific TFP shocks, country-specific TFP shocks, and global TFP shocks. The estimates seem robust to government spending shocks and Terms of Trade shocks.

Suggested Citation

  • Razzak, Weshah, 2013. "An Empirical Study of Sectoral-Level Capital Investments in New Zealand," MPRA Paper 52461, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:52461

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    References listed on IDEAS

    1. Laabas, Belkacem & Weshah, Razzak, 2011. "Economic Growth and The Quality of Human Capital," MPRA Paper 28727, University Library of Munich, Germany.
    2. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "Minimum Wages and On-the-job Training," NBER Working Papers 7184, National Bureau of Economic Research, Inc.
    3. Razzak, Weshah, 2005. "Explaining the gaps in labour productivity in some developed countries," MPRA Paper 1888, University Library of Munich, Germany, revised May 2006.
    4. Benjamin L Hunt, 2009. "The Declining Importance of Tradable Goods Manufacturing in Australia and New Zealand; How Much Can Growth Theory Explain?," IMF Working Papers 09/16, International Monetary Fund.
    5. Glick, Reuven & Rogoff, Kenneth, 1995. "Global versus country-specific productivity shocks and the current account," Journal of Monetary Economics, Elsevier, vol. 35(1), pages 159-192, February.
    6. Eberly, Janice & Rebelo, Sergio & Vincent, Nicolas, 2012. "What explains the lagged-investment effect?," Journal of Monetary Economics, Elsevier, vol. 59(4), pages 370-380.
    7. Iris Claus & Aaron Gill & Boram Lee & Nathan McLellan, 2006. "An empirical investigation of fiscal policy in New Zealand," Treasury Working Paper Series 06/08, New Zealand Treasury.
    8. Arthur Grimes, 2009. "Capital intensity and welfare: traded and non-trade sector determinants," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(1), pages 21-39.
    9. Hiroki Arato & Katsunori Yamada, 2012. "Japan's Intangible Capital and Valuation of Corporations in a Neoclassical Framework," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(4), pages 459-478, October.
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    12. Evans, Charles L., 1992. "Productivity shocks and real business cycles," Journal of Monetary Economics, Elsevier, vol. 29(2), pages 191-208, April.
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    15. Oscar Parkyn & Tugrul Vehbi, 2014. "The Effects of Fiscal Policy in New Zealand: Evidence from a VAR Model with Debt Constraints," The Economic Record, The Economic Society of Australia, vol. 90(290), pages 345-364, September.
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    18. Jeffrey D. Sachs, 1981. "The Current Account and macroeconomic Adjustment in the 1970s," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1), pages 201-282.
    19. Matthew D. Shapiro, 1986. "Investment, Output, and the Cost of Capital," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(1), pages 111-164.
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    More about this item


    Investments; sectoral-level; TFP shocks; panel data;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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