INDEPENDENT NEWS

Reserve Bank Of New Zealand Discussion Papers

Published: Thu 22 Dec 2005 04:07 PM
THE LATEST RESERVE BANK OF NEW ZEALAND DISCUSSION PAPERS
December 21, 2005
The following Discussion Papers have been released on the Reserve Bank's website. The discussion papers are available at http://www.rbnz.govt.nz/research/discusspapers/
---------------
DP2005/06. A Simple, Structural, and Empirical Model of the Antipodean Transmission Mechanism Thomas A. Lubik http://www.rbnz.govt.nz/research/discusspapers/dp2005.html#P24_1284
DP2005/07. Discretionary Policy, Potential Output Uncertainty, and Optimal Learning James Yetman http://www.rbnz.govt.nz/research/discusspapers/dp2005.html#P17_450
---------------
DP2005/06 A Simple, Structural, and Empirical Model of the Antipodean Transmission Mechanism
Thomas A. Lubik
http://www.rbnz.govt.nz/research/discusspapers/dp2005.html#P24_1284
Abstract
This paper studies the transmission of business cycles and the sources of economic fluctuations in Australia and New Zealand by estimating a Bayesian DSGE model. The theoretical model is that of two open economies that are tightly integrated by trade in goods and assets. They can be thought of as economically large relative to each other, but small with respect to the rest of the world. The two economies are hit by a variety of country-specific and world-wide shocks. The main findings are that the pre-eminent driving forces of Antipodean business cycles are worldwide technology shocks and foreign, ie rest-of-the-world, expenditure shocks. Domestic technology shocks and monetary policy shocks appear to play only a minor role. Transmission of policy shocks is asymmetric, and neither central bank is found to respond to exchange rate movements. The model can explain 15 percent of the observed exchange rate volatility.
DP2005/07 Discretionary Policy, Potential Output Uncertainty, and Optimal Learning
http://www.rbnz.govt.nz/research/discusspapers/dp2005.html#P17_450
James Yetman
Abstract
We compare inflation targeting, price level targeting, and speed limit policies when a central bank sets monetary policy under discretion, and must learn about the level of potential output over time. We show that if the central bank learns optimally over time, a speed limit policy dominates [is dominated by] a price level target if society places a high [low] weight on inflation stability. Inefficient learning on the part of the central bank can radically change this conclusion. A speed limit policy is favoured if the central bank places too much weight on recent data when estimating potential output, while a price level target is favoured if the central bank places too much weight on historical data.
ENDS

Next in Business, Science, and Tech

Govt declines application to mine conservation land
By: New Zealand Government
Deer Milk wins Innovation Award at Fieldays
By: Pamu Farms
Regulator concerned at Fonterra's milk price calculations
By: BusinessDesk
Waves trigger Antarctic ice shelf collapse
By: Australian Antarctic Program
Latest Housing Affordability Measure (HAM) released
By: Ministry of Business Innovation and Employment
Avocado prices smash records
By: Statistics New Zealand
Conservation land saved from coal mine
By: Forest And Bird
Coal Mining Rejection is a Win for People-Power
By: 350 Aotearoa
Te Kuha protection a victory for the people, climate change
By: Coal Action Network
‘Green’ mining encouraged, but barriers remain
By: NZ Energy and Environment Business Week
Chefs rave about Pāmu deer milk
By: Pamu Farms
Commission concerned Fonterra's risk estimate is too low
By: Commerce Commission
Shane Jones lambasts Fonterra at Fieldays
By: RNZ
PM needs to rein in motor mouth Jones
By: New Zealand National Party
Helping dairy farmers avoid FEI penalties
By: GrainCorp Feeds
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media