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2013

An Analysis of Benefit Flows in New Zealand Using a Social Accounting Framework (WP 13/01)

Authors: Omar Aziz, Nick Carroll and John Creedy. This paper presents a social accounting model to examine the entrants, exits and transitions of individuals among a wide range of benefit categories in New Zealand. Transition rates and flows are estimated separately for periods before the global financial crisis (GFC) and periods following the crisis. The data were obtained from the Benefit Dynamics Dataset maintained by the Ministry of Social Development. The model is used to examine, using simulations, the implications for the time profile of changes in the stock of benefit recipients under a range of counterfactual situations. It is suggested that the model can provide a useful tool for policy analysis.

The Effects of Fiscal Policy in New Zealand: Evidence from a VAR Model with Debt Constraints (WP 13/02)

Authors: Oscar Parkyn and Tugrul Vehbi. This paper investigates the macroeconomic effects of fiscal policy in New Zealand using a structural Vector Autoregression (SVAR) model. The model is the five-variable structural vector autoregression (SVAR) framework proposed by Blanchard and Perotti (2005), further augmented to allow for the possibility that taxes, spending and interest rates might respond to the level of the debt over time.

Export performance, invoice currency, and heterogeneous exchange rate pass-through (WP 13/03)

Authors: Richard Fabling and Lynda Sanderson. This paper examines the extent to which New Zealand exporters maintain stable New Zealand dollar prices by passing on exchange rate changes to foreign customers..

Measuring Saving Rates in New Zealand: An Update (WP 13/04)

Authors: Emma Gorman, Grant M Scobie and Yongjoon Paek. This paper reviews the flow approach (income less consumption) to measuring saving and the associated trends in sectoral saving rates for New Zealand, as derived from the national accounts.

New Zealand Households and the 2008/09 Recession (WP 13/05)

Authors: Christopher Ball and Michael Ryan. This paper quantifies welfare changes over the 2008/09 recession for different types of households in New Zealand.

Social Expenditure in New Zealand: Stochastic Projections (WP 13/06)

Authors: John Creedy and Kathleen Makale. This paper presents projections for 13 categories of social spending in New Zealand over the period 2011-2061. The projections are based on detailed demographic estimates covering fertility, migration and mortality disaggregated by single year of age and gender.

Tax Policy with Uncertain Future Costs: Some Simple Models (WP 13/07)

Authors: Christopher Ball and John Creedy. This paper considers the extent to which the standard argument, that the disproportionate excess burden of taxation suggests the use of tax-smoothing in the face of future cost increases, is modified by uncertainty regarding the future.

Regression Estimates of the Elasticity of Taxable Income and the Choice of Instrument (WP 13/08)

Authors: Simon Carey, John Creedy, Norman Gemmell and Josh Teng. This paper examines estimation of the elasticity of taxable income using instrumental variable regression methods.

Population Ageing and the Growth of Income and Consumption Tax Revenue (WP 13/09)

Authors: Christopher Ball and John Creedy. This paper investigates the implications of population ageing and changes in labour force participation rates for projections of revenue obtained from personal income taxation and a consumption tax (in the form of a broad-based goods and services tax).

Private Returns to Tertiary Education - How Does New Zealand Compare to the OECD? (WP 13/10)

Authors: James Zuccollo, Sholeh Maani, Bill Kaye-Blake and Lulu Zeng. How do private returns to tertiary education in New Zealand compare internationally? According to the latest OECD measures, the private rate of return for New Zealand is 8.9%, compared to an OECD average of 12.4%, placing New Zealand toward the bottom of the OECD ranking. The aim of this study is to better understand the reasons for that gap and determine whether the low returns could be considered as problems amenable to policy interventions.

Alternative Distributions for Inequality and Poverty Comparisons (WP 13/11)

Author: John Creedy. This paper provides an introductory review of the alternative possible income distributions which can be used when making cross-sectional evaluations of the effects of taxes and transfers using a household economic survey. This paper attempts to clarify the various alternatives, both for users of data and those wishing to interpret results.

Intergenerational Smoothing of New Zealand's Future Fiscal Costs (WP 13/12)

Author: Ross Guest. This paper applies an overlapping generations model in order to evaluate the implications of intergenerational smoothing of New Zealand’s future fiscal costs. The analysis complements the New Zealand fiscal projections of Bell et al. (2010) and the New Zealand tax smoothing analysis in Davis and Fabling (2002).

The Distributional Impact of Population Ageing (WP 13/13)

Authors: Omar A Aziz, Christopher Ball, John Creedy and Jesse Eedrah. This paper examines the potential distributional impacts of demographic change, particularly population ageing, and changes to labour force participation that are projected to arise over the next 50 years.

Housing Affordability in New Zealand: Evidence from Household Surveys (WP 13/14)

Authors: David Law and Lisa Meehan. Housing affordability has been a topic of much interest in New Zealand over recent years with the median house price increasing by over 50% between 2004 and 2008. The aim of this paper is to inform debate by drawing out evidence from two surveys: the Household Economic Survey (HES); and the Survey of Family, Income and Employment (SoFIE).

China's recent growth and its impact on the New Zealand economy (WP 13/15)

Authors: Scott Bowman and Patrick Conway. The People’s Republic of China has become increasingly important to the New Zealand economy since the start of economic liberalisation in China more than 30 years ago, particularly in the past decade. This paper is the first of three looking at the impact of China on the New Zealand economy.

The Outlook for China's Growth and its Impact on New Zealand Exports (WP 13/16)

Authors: Scott Bowman and Patrick Conway. This paper examines the sustainability of China’s economic growth and demand for commodities, and the impact that China is likely to have on the New Zealand economy in the next decade.

Empirical Evidence on Growth Spillovers from China to New Zealand (WP 13/17)

Authors: Denise R Osborn and Tugrul Vehbi. This paper provides a quantitative analysis of the impact on New Zealand of economic growth in China through the framework of an econometric model.

Estimating New Zealand's Output Gap Using a Small Macro Model (WP 13/18)

Author: Kam Leong Szeto. This paper provides estimates of the potential growth and spare capacity of the New Zealand economy using a small macro model for the period 1994-2012.

Parameter Uncertainty and the Fiscal Multiplier (WP 13/19)

Author: Jamie Murray. The paper notes many governments have responded to deterioration of their fiscal positions by planning large consolidations. A question arises as to what extent these plans might reduce aggregate demand in the economy and slow its cyclical recovery.

The Requirements for Long-Run Fiscal Sustainability (WP 13/20)

Authors: Robert Buckle and Amy Cruickshank. This paper discusses the link between the government budget constraint and fiscal sustainability, how fiscal sustainability can be measured and why it's important.