https://isiarticles.com/bundles/Article/pre/pdf/27629.pdf

A structural VAR business cycle model for a volatile small open economy

This paper develops a new open economy structural VAR model of the New Zealand economy. The model adopts techniques introduced by Cushman and Zha (1997) and Dungey and Pagan (2000) to identify international and domestic shocks and dynamic responses to these shocks in a small open economy. The international variables are block exogenous and the model includes restrictions on contemporaneous and lagged variables. Novel features include the introduction of an expanded set of domestic financial variables not captured in previous New Zealand VAR models, the use of a forward looking Taylor Rule to identify monetary policy, and the introduction of a climate variable to capture the impact of climatic conditions on the business cycle. Key results to emerge are the significant influence of international variables on the New Zealand business cycle, the importance of separately identifying import price and export price shocks, and the significant influence of climate.

https://www.econstor.eu/bitstream/10419/205501/1/twp2002-26.pdf

A structural VAR model of the New Zealand business cycle

Assessing and hedging the cost of unseasonal weather : case of the apparel sector.

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 variance trade-off. The model includes a forward- looking Taylor Rule to identify monetary policy and the impact of monetary policy is evaluated by deriving a monetary policy index using a procedure suggested by Dungey and Pagan (2000). Monetary policy has generally been counter-cyclical, thereby reducing business cycles and inflation variability. Exceptions are in 1993 when monetary policy accentuated the business cycle upswing and in 1998 when monetary policy accentuated the recession, although its impact in 1998 was small relative to the impact of adverse climatic conditions. During the initial years of inflation targeting monetary policy tended to simultaneously reduce inflation and output variability. From 1996 to 2001 monetary policy was less effective in reducing inflation and output variability. This latter period included a brief experiment with a Monetary Conditions Index, the Asian crisis and a large adverse domestic climate shock.

The impact of monetary policy on New Zealand business cycles and inflation variability

Weekly weather and economic activities on a national scale: an example using united states retail trade data

Recent studies relating to the human use of the atmosphere have emphasized the need for investigations into the economics of weather and climate. They reveal that little attention has been given by meteorologists to the non-scientific gains of their profession. Of the many gains, those affecting the agricultural community are of primary importance. The technique of assessing the gains associated with monetary variations in agricultural production is examined through the use of an “agroclimatological model” for several agricultural products in New Zealand. The most significant partial correlations were examined, the subsequent analysis indicating the importance of climatic variations on various aspects of agricultural production, and their effects on agricultural incomes. The major finding of the analysis is the significance of climatic factors in their influence on butterfat production, a “significant” climatic variation such as a “wet” January, for example, being “worth” about $N.Z. 2 million to...

W. J. Maunder

Papers

Effect of significant climatic factors on agricultural production and incomes