1,720,982 research outputs found
Migrants increase our incomes
Full text linkA new Insight from the New Zealand Institute of Economic Research (NZIER) shows that increasing net migration would lift incomes not just for immigrants but for the native population.
An additional 40,000 people a year for 10 years increases GDP per capita by a chunky $410 a year.
“A more ambitious population policy is needed to increase New Zealand’s population.” said Dr Kirdan Lees, Senior Economist at NZIER. “New Zealand’s point-based immigration framework gets the mix of migrants required about right. But we need to do more to keep lifting the number of migrants that come.”
Almost one-in-four New Zealanders are born overseas but the current policy of 45,000 to 50,000 migrants a year is too low and very arbitrary – bringing in more migrants would lift incomes.
Immigrants provide firms with new skillsets, allowing firms to access new markets, new ideas and new products. A deeper population base also helps firms to get big and offset initial start-up or fixed costs that can be high. But our work shows that the impact on incomes outweighs the inflationary impacts of migration.
International studies also point to positive effects of immigration
Big city life? Challenges and trade-offs for Auckland city
Full text linkPriming Auckland for ambitious future growth requires change on many policy fronts.
Auckland is starting to swell. Rapid population and income growth are occurring, but Auckland’s narrow geography – with harbours on both sides of the city – limits land availability.
Without change Auckland cannot reap the benefits of a growing population. Expect lower living standards from longer commute times and rising housing costs.
“The outcomes we want from Auckland, and the outcomes we should expect given Auckland’s narrow geography, are two very different things.” said Dr Kirdan Lees. “That heightens the need to get infrastructure and other urban policies right”.
Policymakers have generally identified the right set of levers – including extending the urban boundary, reducing urban planning restrictions and improving productivity in the housing sector.
But improving transport infrastructure to reduce the cost of land, making it cheaper to build and buy housing for families, is an option that looks a little underdone in the public debate.
NZIER recommends:
Taking a closer look at the benefits of transport infrastructure projects that reduce the cost of well-located land, reducing the cost of housing.
Keep grinding away at construction productivity – a 15 percent improvement makes the largest gain to the welfare of Auckland families compared to other policies.
Extend the urban boundary to include 25 percent more land by 2031. Our framework suggests that policy would make each family $860 a year better off.
Implement change over a full range of policies: our work suggests leaving the heavy lifting to a single policy makes achieving the kinds of living standard untenable.
The report, “Big city life? Challenges and trade-offs for Auckland city”, was funded by the Reserve Bank, New Zealand Treasury, the Ministry of Transport and NZIER’s public good programme, which supports research into areas of general interest to New Zealanders
Overview of a recent Reserve Bank workshop: nowcasting with model combination
No full textIn December 2008, jointly with the Bank for International Settlements, the Reserve Bank hosted a workshop entitled “Nowcasting with Model Combination”. This workshop was an opportunity for central bank practitioners and local and offshore academics to discuss recent technical advances in how to combine models for ‘nowcasting’ – the forecasting of current or near-term economic conditions. This note provides an overview of some themes that emerged from the workshop. Full papers are available from http://www.rbnz.govt.nz/research/workshops/december2008/3421588.html
Introducing KITT: The Reserve Bank of New Zealand new DSGE model for forecasting and policy design
No full textThe Reserve Bank of New Zealand has developed a new core macroeconomic model to replace the existing FPS (Forecasting and Policy System) model. KITT (Kiwi Inflation Targeting Technology), the new model, advances our modelling towards the frontier in terms of both theory and empirics. KITT reconfirms the Reserve Bank’s commitment to having a theoretically well-founded model at the heart of the monetary policy process. This article provides context about the reasons for the move to the new model, and an overview of the model itself. KITT builds a rich picture of the macroeconomic economy from specific assumptions about the microeconomic behaviour of households and firms that interact in several goods markets. The article illustrates the structure of the model, how this structure determines the way in which shocks or unexpected events propagate through the economy, and the role of the model in the forecast process.
2013 Western market visitor growth: what explains the increase in advanced-economy visitors?
No full textInternational arrivals to New Zealand in 2013 grew at the fastest pace in a decade, according to this report to Tourism New Zealand.
Key points
There has been stellar growth in visitors from Western markets
New Zealand experienced strong growth in visitor arrivals from traditional Western markets across 2013 led by once-in-a-generation US growth.
The US total visitor market surged 13.4 percent – much higher than expected – fuelled by holidaymaker growth of over 21 percent in 2013.
Economic factors matter…
The recovery in visitors has coincided with better economic conditions following the GFC.
There are also other economic factors at play including the high Kiwi dollar that dampens visitor growth and generally positive changes in air capacity.
…but New Zealand specific factors have been key
But economic growth alone cannot explain the rise in visitor numbers. There are additional New Zealand specific effects such as:
- marketing campaigns that last year included middle-earth themes
- increased competition in key markets such as the US
- expanding cruise capacity over a number of years.
Our analysis shows that New Zealand specific factors played a large role in the recovery in visitor numbers across most markets. Partial indicators suggest marketing effectiveness was the key driver
The stabilisation problem: the case of New Zealand
No full textThis paper examines stabilisation bias - the difference between the inferior macroeconomic outcomes attained with discretionary monetary policy relative to the ideal that could be attained with commitment policy. The paper works within the linear-quadratic framework and represents the monetary policy problem for the central bank as setting the interest rate in order to minimise an explicit loss function for macroeconomic variables. The government's problem is one of "optimal negotiation", whereby the government, representing society, joins with the central bank to search for the optimal set of loss function parameters to be embedded in a contract with the central bank. The framework, due to Rogoff (1985), is usefully applied to the case of New Zealand where recent Policy Target Agreements - contracts between the government and the central bank - are interpreted as representing society's preferences between inflation, output and other dimensions of macroeconomic stability. Within the context of an estimated, small open economy model, a sizeable stabilisation bias is found for New Zealand. Substantial reductions in the stabilisation bias can be achieved by strategic optimal delegation behaviour on the part of the government. It transpires that the weight the central bank should have on the variance of the output gap is considerably lower than the weight society places on the variance of the output gap.
Fighting fit? Assessing New Zealand’s fiscal sustainability
Full text linkThis report highlights the unprecedented fiscal challenges that New Zealand politicians will face in coming decades.The report recommends that:The government better manages expectations about what New Zealand can afford in the future by mapping out the types of spending and taxation policies that will change. Taxes and government spending are changed soon to start spreading the costs of the ageing adjustment over several years. Broadening the tax base and reorienting welfare back to those most in need are good starting points. Political parties seek a bipartisan agreement on addressing New Zealand’s future superannuation costs
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