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2003

Changes in New Zealand's Production Structure: An Input Output Analysis (WP 03/01)
WP 03/01. Author: Iris Claus. This paper investigates changes in the production structure of the New Zealand economy using input output data. The analysis is undertaken at the 25-industry level using inter industry transactions for 1971-72, 1977-78, 1981-82, 1986-87, 1990-91 and 1994-95.
Property Rights and Environmental Policy: A New Zealand Perspective (WP 03/02)
WP 03/02. Author: Kevin Guerin. This paper is intended to lay out a preliminary foundation for applying a property rights perspective to environmental policy issues facing New Zealand.
Geography, Trade and Growth: Problems and Possibilities for the New Zealand Economy (WP 03/03)
WP 03/03. Author: Philip McCann. This paper discusses the latest thinking in the relationships between the economics of trade, geography and industrial clusters. The aim of the paper is to explain the relevance of these various arguments for the economy of New Zealand and to suggest a possible public policy role for overcoming the growth problems associated with geographic periphery.
Demographic Change and New Zealand’s Economic Growth (WP 03/04)
WP 03/04. Author: John Bryant. This paper defines "demography" narrowly as population size, growth, and age-structure, and examines the likely effects on New Zealand's growth rate in GDP per capita, relative to the rest of the OECD.
The Built-in Flexibility of Income and Consumption Taxes in New Zealand (WP 03/05)
WP 03/05. Authors: Norman Gemmell and John Creedy. This paper provides estimates of individual and aggregate revenue elasticities of income and consumption taxes in New Zealand, based on the 2001 tax structure and expenditure patterns.
Productivity in New Zealand 1988 to 2002 (WP 03/06)
WP 03/06. Authors: Nathan McLellan, Melody Guy and Melleny Black. This paper reports new aggregate and industry productivity series for the New Zealand economy for the period 1988 to 2002.
Can population projections be used for sensitivity tests on policy models? (WP 03/07)
WP 03/07. Author: John Bryant. This paper outlines some of the conditions that variant-based sensitivity tests must meet if they are to be informative. It then describes four common situations where these conditions are not met, so that conventional sensitivity tests are not informative.
Labour Supply Incentives in Alternative Tax and Transfer Schemes: A Diagrammatic Introduction (WP 03/08)
WP 03/08. Author: John Creedy. The aim of this paper is to illustrate some of the complexities involved in modelling the incentive effects of taxes and transfers, using only basic diagrammatic methods.
The impact of monetary policy on New Zealand business cycles and inflation variability (WP 03/09)
WP 03/09. Authors: Nathan McLellan, Kunhong Kim and Bob (Robert) A Buckle. This paper uses the open economy structural VAR model developed in Buckle, Kim, Kirkham, McLellan and Sharma (2002) to evaluate the impact of monetary policy on New Zealand business cycles and inflation variability and the output/inflation variability trade-off.
Population Ageing In New Zealand: Implications for Living Standards and the Optimal Rate of Saving (WP 03/10)
WP 03/10. Authors: Ross Guest, John Bryant and Grant M Scobie. There has been wide debate about whether New Zealand should prepare for population ageing by increasing national savings. The debate had not, however, involved explicit consideration of possible time paths for savings, consumption, debt, and other relevant macroeconomic variables; nor have explicit principles been offered for determining which of these time paths are to be preferred. This paper addresses the question of choosing time paths through the use of a Ramsey-Solow model of optimal saving, adapted for investigating problems of population ageing.
Taxation, Reranking and Equivalence Scales (WP 03/11)
WP 03/11. Authors: Justin van de Ven and John Creedy. This paper considers whether an equivalence scale implicit in transfer policy can be inferred from summary measures of reranking (whereby the rank order of pre-tax incomes is different from that of the post-tax distribution).
Productivity measurement: Alternative approaches and estimates (WP 03/12)
WP 03/12. Authors: Peter Mawson, Nathan McLellan and Kenneth I Carlaw. This paper provides a review of conceptual and methodological issues in measuring productivity. Attention is given to the concept of productivity and the relationship between productivity and technological change.
Wage and Employment Rates in New Zealand from 1991 to 2001 (WP 03/13)
WP 03/13. Authors: Rosanna Scutella and Guyonne Kalb. This paper presents results for five separately estimated sets of employment and wage equations. The New Zealand working-age population is divided into sole parents, single men, single women, married men and married women.
Fiscal Policy, Growth and Convergence in Europe (WP 03/14)
WP 03/14. Authors: Richard Kneller and Norman Gemmell. Recent evidence on the impact of fiscal policy - taxes, public expenditures and budget deficits - on long-run growth in OECD countries has adopted the Barro (1990) framework to distinguish between 'productive' and 'unproductive' expenditures, and 'distortionary' and 'non-distortionary' taxes. Using estimated long-run growth effects from these fiscal variables, this paper simulates the effects on growth rates of observed fiscal policy changes in the EU.
Modelling the Effect of Population Ageing on Government Social Expenditures (WP 03/15)
WP 03/15. Author: John Bryant. This paper reviews and extends a new framework, developed by Razin, Sadka, and Swagel, for capturing the effect of population ageing on public support for government social expenditures.
New Zealand’s Production Structure: An International Comparison (WP 03/16)
WP 03/16. Authors: Kathy Li and Iris Claus. The purpose of this paper is to compare New Zealand's production structure in the mid-1990s to that in other OECD countries using input output analysis. Comparable inter industry transactions tables to the New Zealand data are available for Australia, Belgium, Denmark, Finland, Germany, Norway and the United Kingdom.
Survey Reweighting for Tax Microsimulation Modelling (WP 03/17)
WP 03/17. Author: John Creedy. This paper describes a range of 'minimum distance' methods used to compute new weights for large cross-sectional surveys used in microsimulation modelling.
New Zealand’s Social Assistance System:Financial Incentives to Work (WP 03/18)
WP 03/18. Author: Patrick Nolan. This paper is a stock take of the financial incentives to work present in New Zealand's social assistance system. The purpose of this paper is to provide a basis for research on problems facing the social assistance system and dilemmas that would be likely to arise when considering potential initiatives to address such problems.
Asymmetric Information, Financial Intermediation and the Monetary Transmission Mechanism: A Critical Review (WP 03/19)
WP 03/19. Authors: Iris Claus and Arthur Grimes. Macroeconomic models currently used by policy makers generally assume that the workings of financial markets can be fully summarised by financial prices, because the Modigliani and Miller (1958) theorem holds. This paper argues that these models are too limited in describing how monetary policy (and other) shocks are transmitted to the economy and points to new directions.
Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation (WP 03/20)
WP 03/20. Authors: John Creedy and Guyonne Kalb. This paper provides an introduction to the basic analytics of discrete hours labour supply modelling. Special attention is given to model specification, maximum likelihood estimation and microsimulation of tax reforms.
Objectives, Targets and Instruments for Crown Financial Policy (WP 03/21)
WP 03/21. Author: Eric Hansen. The policy framework of objectives, targets and instruments is adopted as a basis for organising the theory literature relating to Crown financial policy. Applying this framework, seven distinct policy objectives are identified as potentially relevant to the future development of policy.
Does Consumer Confidence Forecast Consumption Expenditure in New Zealand? (WP 03/22)
WP 03/22. Author: Khoon Lek Goh. This paper examines the ability of consumer confidence to forecast consumption expenditure in New Zealand. A two-step process commonly used by other researchers, which was developed by Carroll, Fuhrer and Wilcox (1994), was utilised.
New Zealand Labour Supply from 1991-2001: An Analysis Based on a Discrete Choice Structural Utility Model (WP 03/23)
WP 03/23. Authors: Rosanna Scutella and Guyonne Kalb. This paper presents results for four separately estimated sets of discrete choice labour supply models using the Household Economic Surveys from 1991/92 up to 2000/01.
Encouraging Quality Regulation: Theories and Tools (WP 03/24)
WP 03/24. Author: Kevin Guerin. Downstream design involves creating a regime to give the appropriate incentives to firms and consumers. Upstream design seeks to incentivise regulators themselves to create and operate high quality regulatory regimes. This paper focuses on the latter.
A Comparison of the NZTM and FPS Models of the NZ Economy (WP 03/25)
WP 03/25. Authors: Richard Gray, Paul Gardiner, Kam Leong Szeto and David Hargreaves. This paper investigates and compares the dynamic properties of the New Zealand Treasury model (NZTM) and the current version of the Reserve Bank's Forecasting and Policy System model (FPS).
Work and Family Balance: An Economic View (WP 03/26)
WP 03/26. Authors: Veronica Jacobsen, Lindy Fursman and Jason Varuhas. The way in which people balance their work and family responsibilities is becoming increasingly prominent on the policy agenda. This paper uses an economic framework to explore the rationale for government policies to improve work/family balance.
The Ageing of the New Zealand Population, 1881-2051 (WP 03/27)
WP 03/27. Author: John Bryant. The paper reviews data on long-term changes in the age structure of the New Zealand population.
Geometric Return and Portfolio Analysis (WP 03/28)
WP 03/28. Author: Brian McCulloch. This paper explains issues in the distinction between expected geometric return and expected annual arithmetic return and applies them in the context of the calculations underlying the projections for the New Zealand Superannuation Fund.
The Excess Burden of Taxation and Why it (Approximately) Quadruples When the Tax Rate Doubles (WP 03/29)
WP 03/29. Author: John Creedy. The 'excess burden' of taxation represents an efficiency loss which must be compared with any perceived gains arising either from income redistribution or the non-transfer expenditure carried out by the government.
Three Policy Options for Crown Financial Policy (WP 03/30)
WP 03/30. Author: Eric Hansen. In this paper a qualitative analysis is conducted to select three high-level policies for detailed quantitative analysis in future papers. The three policies vary in terms of level of risk.
Competition Policy in Small Distant Open Economies: Some Lessons from the Economics Literature (WP 03/31)
WP 03/31. Authors: Patrick Hughes and Lewis Evans. This paper reviews the economic literature on the implications of an economy's size and isolation for competition law.
Household Saving Behaviour in New Zealand: Why do Cohorts Behave Differently? (WP 03/32)
WP 03/32. Authors: John K Gibson and Grant M Scobie. The aim of this paper is to add to the understanding of saving decisions by households. The saving behaviour of households is found to differ depending on the birth cohort of the household head. This paper seeks to explain why this pattern might exist.
Reweighting the New Zealand Household Economic Survey for Tax Microsimulation Modelling (WP 03/33)
WP 03/33. Authors: John Creedy and Ivan Tuckwell. This paper reports a reweighting exercise for the New Zealand Household Economic Survey, which is the basis of the Treasury's microsimulation model, TaxMod.
Population Ageing in New Zealand: The Impact on Living Standards and the Optimal Rate of Saving with a Flexible Real Exchange Rate (WP 03/34)
WP 03/34. Authors: Ross Guest, John Bryant and Grant M Scobie. The purpose of this paper is to extend the simulation analysis of population ageing in Guest, Bryant and Scobie (2003).
Qualifications, Employment and the Value of Human Capital, 1986-2001 (WP 03/35)
WP 03/35. Authors: Jason Timmins, Dean Hyslop and David (Dave) C Maré. This paper summarises the changing nature of qualifications across the working age population in New Zealand over the period from 1986 to 2001, and investigates the relationships between the changing qualification distribution and employment and income.