scholarly journals A Multi-Regional Computable  General Equilibrium Model  for New Zealand

2021 ◽  
Author(s):  
◽  
Nathaniel Robson
Keyword(s):  
New Zealand ◽  
Labour Market ◽  
Maximum Entropy ◽  
Real Wage ◽  
Cge Model ◽  
Additional Structure ◽  
Bottom Up ◽  
Basic Model ◽  
Cge Modelling ◽  
Distribution Services

<p>Although New Zealand has had an active CGE modelling community since the 1980's, a multi-regional CGE model for the country has not been developed until now. This thesis presents a prototype multi-regional CGE model to demonstrate the feasibility of developing a comprehensive model that captures the benefits of modelling agent behaviour with a bottom-up approach. The prototype model is built upon bottom-up regional micro-foundations and New Zealand data is used to operationalise a particular implementation of the model. The thesis fills an important gap in the New Zealand CGE modelling literature as none of the models in current use have a structure involving bottom-up regional modelling. The method of implementation is also a key contribution, utilising a maximum-entropy approach to overcome data shortages. An illustrative simulation of a natural disaster that strikes the Wellington central business district demonstrates the strengths of the bottom-up multi-regional approach - that the model can capture differential effects across regions of shocks that occur at the regional level, and incorporate  flow-on and feedback effects between regions. Sensitivity testing of the substitution elasticity between domestic sources of products reinforces the importance of empirically-estimated parameters in CGE models. The basic model is extended in two ways. The first is to introduce modelling of distribution services as has been done in the ORANI and subsequently FEDERAL models. The key structural difference here is that products identified as distribution services are required to facilitate movement of other products from seller to buyer. Thus there are no opportunities to substitute away from these services if they become relatively more expensive. To implement the additional structure, sets of coefficients are specified to control technical possibilities in the usage of the distribution services. These include switches that can dictate, for example, that wholesale trade is only involved in the delivery of tangible products, that retail trade is only used by in-region purchasers, and that transport is required for moving physical products across regional borders or to exporters. That these assumptions can be integrated seamlessly into the database highlights the strength of the maximum-entropy approach used to generate the multi-regional input-output database. Simulations of an oil price shock show that the regional assumptions surrounding the distribution networks are material to the results. The second extension to the model is the addition of a module to control the degree of inter-regional labour mobility. Essentially the user is given the ability to specify the extent to which households respond to regional real wage di erences by moving to regions with relatively higher rates. Therefore, in short-run simulations labour can be made more mobile than capital, while in the long-run it can be less mobile than capital. The module also introduces additional structure to link populations, households, and labour market components. One important element of this new structure is a link back to the endogenous labour supply theory of the basic model. Publicly available demographic and labour market data are used to implement the mobility module. The importance of a mobility response to relative real wage changes is explored in an illustrative application looking at the impact of regionally-concentrated immigration  flows. The simulations suggest that population movements can work to dissipate the welfare effects of such migration inflows.</p>

scholarly journals A Multi-Regional Computable  General Equilibrium Model  for New Zealand

2021 ◽  
Author(s):  
◽  
Nathaniel Robson
Keyword(s):  
New Zealand ◽  
Labour Market ◽  
Maximum Entropy ◽  
Real Wage ◽  
Cge Model ◽  
Additional Structure ◽  
Bottom Up ◽  
Basic Model ◽  
Cge Modelling ◽  
Distribution Services

<p>Although New Zealand has had an active CGE modelling community since the 1980's, a multi-regional CGE model for the country has not been developed until now. This thesis presents a prototype multi-regional CGE model to demonstrate the feasibility of developing a comprehensive model that captures the benefits of modelling agent behaviour with a bottom-up approach. The prototype model is built upon bottom-up regional micro-foundations and New Zealand data is used to operationalise a particular implementation of the model. The thesis fills an important gap in the New Zealand CGE modelling literature as none of the models in current use have a structure involving bottom-up regional modelling. The method of implementation is also a key contribution, utilising a maximum-entropy approach to overcome data shortages. An illustrative simulation of a natural disaster that strikes the Wellington central business district demonstrates the strengths of the bottom-up multi-regional approach - that the model can capture differential effects across regions of shocks that occur at the regional level, and incorporate  flow-on and feedback effects between regions. Sensitivity testing of the substitution elasticity between domestic sources of products reinforces the importance of empirically-estimated parameters in CGE models. The basic model is extended in two ways. The first is to introduce modelling of distribution services as has been done in the ORANI and subsequently FEDERAL models. The key structural difference here is that products identified as distribution services are required to facilitate movement of other products from seller to buyer. Thus there are no opportunities to substitute away from these services if they become relatively more expensive. To implement the additional structure, sets of coefficients are specified to control technical possibilities in the usage of the distribution services. These include switches that can dictate, for example, that wholesale trade is only involved in the delivery of tangible products, that retail trade is only used by in-region purchasers, and that transport is required for moving physical products across regional borders or to exporters. That these assumptions can be integrated seamlessly into the database highlights the strength of the maximum-entropy approach used to generate the multi-regional input-output database. Simulations of an oil price shock show that the regional assumptions surrounding the distribution networks are material to the results. The second extension to the model is the addition of a module to control the degree of inter-regional labour mobility. Essentially the user is given the ability to specify the extent to which households respond to regional real wage di erences by moving to regions with relatively higher rates. Therefore, in short-run simulations labour can be made more mobile than capital, while in the long-run it can be less mobile than capital. The module also introduces additional structure to link populations, households, and labour market components. One important element of this new structure is a link back to the endogenous labour supply theory of the basic model. Publicly available demographic and labour market data are used to implement the mobility module. The importance of a mobility response to relative real wage changes is explored in an illustrative application looking at the impact of regionally-concentrated immigration  flows. The simulations suggest that population movements can work to dissipate the welfare effects of such migration inflows.</p>

The Economics of wages and wages policy in the depression and recovery period: distinctive elements in the New Zealand debate, 1931- 1936

1970 ◽  
Vol 15 (1) ◽  
Author(s):  
A. M. Endres
Keyword(s):  
New Zealand ◽  
Real Wage ◽  
Labour Productivity ◽  
Recovery Period ◽  
Prima Facie ◽  
Currency Devaluation ◽  
Money Wage ◽  
Distinctive Features ◽  
Compulsory Arbitration ◽  
Wage Cuts

This article discusses distinctive features of the New Zealand debate on the economics of wages and wages policy from 1931 up to the restoration of compulsory arbitration in 1936. Local economic orthodoxy proffered advice which, consistent with Keynes (1936), turned on the need for a general real wage reduction effected mostly through currency devaluation, rather than through further money wage cuts. Dissenters were critical of currency devaluation; they stressed excessively generous unemployment relief, real wage 'overhang' and structural real wage distorttons. Tentative estimates of both aggregate real product wage and labour productivity changes demonstrate, prima facie, that at least one strand in the dissenting argument was defensible.

scholarly journals What factors enable mid‐life carers to re‐enter the labour market in New Zealand?

2020 ◽  
Author(s):  
Jeroen J. A. Spijker ◽  
Fiona M. Alpass ◽  
Joanne Allen ◽  
Christine Stephens
Keyword(s):  
New Zealand ◽  
Labour Market

Segregation in the New Zealand Labour Market

1977 ◽  
Vol 18 (1) ◽  
pp. 104-109 ◽  
Author(s):  
Hazel V. J. Moir
Keyword(s):  
New Zealand ◽  
Labour Market

scholarly journals Adapting to the Recession: Labour Force Changes and Labour Costs Reductions

1970 ◽  
Author(s):  
Anderson Gordon ◽  
Peter Brosnan ◽  
Pat Walsh
Keyword(s):  
New Zealand ◽  
Labour Market ◽  
Labour Force ◽  
Economic Uncertainty ◽  
Employment Contracts ◽  
Labour Market Flexibility ◽  
Labour Costs ◽  
Financial Pressure

This paper will examine two aspects of the labour market flexibility, namely the ability of the workplaces to adjust their workforce and to reduce their relative labour costs. The survey covers the period ending in May 1991 during which firms faced considerable economic uncertainty and financial pressure. As with the above studies it confirms that considerable flexibility existed in the New Zealand labour market prior to the Employment Contracts Act.

scholarly journals Development and Application of a New Zealand General Equilibrium Model

2021 ◽  
Author(s):  
◽  
Adolf Hermanus Stroombergen
Keyword(s):  
New Zealand ◽  
General Equilibrium ◽  
Labour Market ◽  
Free Trade ◽  
Equilibrium Model ◽  
General Equilibrium Model ◽  
Equilibrium Models ◽  
Medium Term ◽  
Wage Rates ◽  
Parameter Values

<p>Whether a country gains or loses from dismantling protection is a question which has received much attention in overseas studies; studies which deal both with the relevant theory and with actual measurement. The topic has not been well analysed in the New Zealand context. Discussion amongst economists and other interested parties has certainly occurred but this has been based more on philosophical and political considerations than on applied economic research. Since questions of protection reform affect the whole economy it is inappropriate to study such problems in a partial or selective framework which cannot capture the interdependencies between each and every sector in the economy. A multi-sectoral general equilibrium model overcomes this deficiency. This thesis is concerned with the development and application of such a model. The model (named JULIANNE) is a medium term policy model designed to answer 'what if' type questions, particularly questions about trade and structure. It is not a forecasting model. Its role is rather like that of a laboratory in the natural sciences, where experiments can be conducted in a situation where certain aspects of the (economic) environment can be controlled by the researcher so that it is possible to measure the relationships between the variables of interest. The closer the environment is to the 'real world' the easier it is to apply deductions from the experiment to reality. But even quite artificial experiments can yield useful insights. The thesis comprises eleven chapters, the first three of which introduce and develop the model, examining some of the overseas general equilibrium models and assessing some of the problems which need to be addressed when constructing such a model for New Zealand; a model with an emphasis on trade and structure. The following three chapters present the JULIANNE model including its equations, a detailed explanation of its features and routines, and its method of solution, which for general equilibrium models is a most important consideration as it distinguishes the purely abstract Walrasian model from a model which is actually computable. Chapters 7 and 8 apply the model to various problems, especially to protection reform, but also to other interesting topics such as export subsidisation, relative occupational wage rates and medium term projections. The issue of model validation (in a general sense) is also covered. In Chapter 9 the model is extended from a single period snapshot model into a multi-period dynamic model, essentially introducing another variable; time, that can be controlled by the experimenter. Some of the results from Chapters 7 and 8 are then reassessed with the extended model, as described in Chapter 10. Results from the application of the model to questions about the effects of changes in protection enabled one to conclude that under flexible factor prices with fixed factor employment, the gains from freer trade vary directly with the values of the export price elasticities of demand, with the potential for economies of scale arising from specialization, and with the time horizon under consideration. They vary inversely with the values of the elasticities of substitution both between domestic and imported goods of a given type, and between goods of different types. Under a different labour market asumption, namely fixed real wage rates and flexible employment, the case for free trade is much stronger (that is, for a given set of parameter values). The profile of protection across sectors can also be important with the not improbable chance that a low uniform level of protection is superior to complete free trade, again depending on parameter values and the characteristics of the labour market. In this connection the observed uniformity of the current protection regime is very dependent on the degree of sectoral disaggregation identified in the model. As the degree of disaggregation increases, the potential for specialization also increases, as does the potential for substitution between different commodity types. Just how important these issues are, is a question for future research.</p>

scholarly journals Development and Application of a New Zealand General Equilibrium Model

2021 ◽  
Author(s):  
◽  
Adolf Hermanus Stroombergen
Keyword(s):  
New Zealand ◽  
General Equilibrium ◽  
Labour Market ◽  
Free Trade ◽  
Equilibrium Model ◽  
General Equilibrium Model ◽  
Equilibrium Models ◽  
Medium Term ◽  
Wage Rates ◽  
Parameter Values

<p>Whether a country gains or loses from dismantling protection is a question which has received much attention in overseas studies; studies which deal both with the relevant theory and with actual measurement. The topic has not been well analysed in the New Zealand context. Discussion amongst economists and other interested parties has certainly occurred but this has been based more on philosophical and political considerations than on applied economic research. Since questions of protection reform affect the whole economy it is inappropriate to study such problems in a partial or selective framework which cannot capture the interdependencies between each and every sector in the economy. A multi-sectoral general equilibrium model overcomes this deficiency. This thesis is concerned with the development and application of such a model. The model (named JULIANNE) is a medium term policy model designed to answer 'what if' type questions, particularly questions about trade and structure. It is not a forecasting model. Its role is rather like that of a laboratory in the natural sciences, where experiments can be conducted in a situation where certain aspects of the (economic) environment can be controlled by the researcher so that it is possible to measure the relationships between the variables of interest. The closer the environment is to the 'real world' the easier it is to apply deductions from the experiment to reality. But even quite artificial experiments can yield useful insights. The thesis comprises eleven chapters, the first three of which introduce and develop the model, examining some of the overseas general equilibrium models and assessing some of the problems which need to be addressed when constructing such a model for New Zealand; a model with an emphasis on trade and structure. The following three chapters present the JULIANNE model including its equations, a detailed explanation of its features and routines, and its method of solution, which for general equilibrium models is a most important consideration as it distinguishes the purely abstract Walrasian model from a model which is actually computable. Chapters 7 and 8 apply the model to various problems, especially to protection reform, but also to other interesting topics such as export subsidisation, relative occupational wage rates and medium term projections. The issue of model validation (in a general sense) is also covered. In Chapter 9 the model is extended from a single period snapshot model into a multi-period dynamic model, essentially introducing another variable; time, that can be controlled by the experimenter. Some of the results from Chapters 7 and 8 are then reassessed with the extended model, as described in Chapter 10. Results from the application of the model to questions about the effects of changes in protection enabled one to conclude that under flexible factor prices with fixed factor employment, the gains from freer trade vary directly with the values of the export price elasticities of demand, with the potential for economies of scale arising from specialization, and with the time horizon under consideration. They vary inversely with the values of the elasticities of substitution both between domestic and imported goods of a given type, and between goods of different types. Under a different labour market asumption, namely fixed real wage rates and flexible employment, the case for free trade is much stronger (that is, for a given set of parameter values). The profile of protection across sectors can also be important with the not improbable chance that a low uniform level of protection is superior to complete free trade, again depending on parameter values and the characteristics of the labour market. In this connection the observed uniformity of the current protection regime is very dependent on the degree of sectoral disaggregation identified in the model. As the degree of disaggregation increases, the potential for specialization also increases, as does the potential for substitution between different commodity types. Just how important these issues are, is a question for future research.</p>

scholarly journals In Support of a 'Living Wage': Research on International and Danish Trends and Issues of 'Working Poor'.

2013 ◽  
Author(s):  
Erling Rasmussen ◽  
Jens Lind
Keyword(s):  
New Zealand ◽  
Labour Market ◽  
Minimum Wage ◽  
Service Sector ◽  
Limit State ◽  
State Regulation ◽  
Working Poor ◽  
Living Wage ◽  
Paid Work ◽  
Starting Point

In May 2012, a campaign started in support of a New Zealand ‘living wage’. This happened in light of many New Zealand workers receiving wages at or just above the statutory minimum wage and that several fast-growing sectors continue to establish many low paid jobs. While the paper’s starting point is the New Zealand ‘living wage’ debate, the issues discussed have been part of international debates about the existence and consequences of low paid work. These debates have highlighted that some countries have been better at containing low paid work. On this background, this paper focuses on the trends and issues surrounding ‘working poor’ in Denmark. As detailed, the Danish labour market has succeeded in having a relatively low level of ‘working poor’. This has even happened in several service sector industries renowned for their propensity to create low paying jobs. However, the paper also questions the stability of the so-called Danish Model based on an open labour market with large in- and outflows of migrants and with a reliance on collective bargaining/agreements, with limit state regulation and, in particular, no statutory minimum wage.

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