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How Many Jobs? A Leading Indicator Model of New Zealand Employment - WP 02/13

Publication Details

  • How Many Jobs? A Leading Indicator Model of New Zealand Employment
  • Published: Aug 2002
  • Status: Current
  • Authors: Claus, Edda; Claus, Iris
  • JEL Classification: C53; E37
  • Hard copy: Available in HTML and PDF formats only.
 

How many jobs?
A leading indicator model of New Zealand employment

New Zealand Treasury Working Paper 02/13

Published: June 2002

Authors: Edda Claus and Iris Claus

Abstract

This paper constructs a composite index of leading indicators of New Zealand employment. The choice of variables and their weights in the composite index are determined by their concordance with employment. The composite index is included in an indicator model to forecast quarterly employment growth. The indicator model explains about 67 percent of the quarterly variation in employment, in sample, and correctly predicted the direction of next period employment almost 80 percent of the time, out of sample.

Table of Contents

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Abstract

Contents

1 Introduction

2 Constructing a composite index of leading indicators

3 A composite index of leading indicators of New Zealand employment

4 A forecasting model of New Zealand employment growth

5 Forecast performance relative to two benchmark models

6 Concluding remarks

Appendix A: Series considered in the construction of the composite index of leading indicators

Appendix B: Data and data sources

References

twp02-13.pdf (327 KB) pp. 1–25

List of Tables

List of Figures

Acknowledgements

We would like to thank Richard Downing, Leo Krippner and Robert Lamy for valuable comments and Joanne Archibald for helpful suggestions about the data. The paper has also benefited from comments by participants of a seminar at the Reserve Bank of New Zealand and the 2001 Australasian Macroeconomic Workshop in Adelaide and two anonymous referees.

Disclaimer

The views expressed in this Working Paper are those of the author(s) and do not necessarily reflect the views of the New Zealand Treasury. The paper is presented not as policy advice, but with a view to inform and stimulate wider debate.

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