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Intra & inter-regional industry shocks: A new metric with application to Australasian currency union

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  • Arthur Grimes

Abstract

We place regional industry structures at centre stage in currency union analysis, decomposing differences between regional and aggregate cycles into “industry structure” and “industry cycle” effects. The industry structure effect indicates whether a region's industry structure causes its cycle to deviate from the aggregate; the industry cycle effect indicates the importance of region-specific shocks in causing a deviation between cycles. We apply the methodology to Australasia. One region, ACT, has a material industry structure effect arising from its heavy central government concentration. No other region has a material industry structure effect; their cycles differ from the aggregate due to region-specific shocks.

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  • Arthur Grimes, 2006. "Intra & inter-regional industry shocks: A new metric with application to Australasian currency union," New Zealand Economic Papers, Taylor & Francis Journals, vol. 40(1), pages 23-44.
    • Handle: RePEc:taf:nzecpp:v:40:y:2006:i:1:p:23-44
    DOI: 10.1080/00779954.2006.9558551
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    1. Arthur Grimes, 2003. "Economic Growth and the Size and Structure of Government: Implications for New Zealand," Working Papers 03_10, Motu Economic and Public Policy Research.
    2. Suzi Kerr, 2003. "Efficient Contracts for Carbon Credits from Reforestation Projects," Working Papers 03_12, Motu Economic and Public Policy Research.
    3. Viv B. Hall & C. John McDermott, 2007. "Regional business cycles in New Zealand: Do they exist? What might drive them?," Papers in Regional Science, Wiley Blackwell, vol. 86(2), pages 167-191, June.
    4. Arthur Grimes & Andrew Aitken, 2004. "What's the Beef with House Prices? Economic Shocks and Local Housing Markets," Working Papers 04_08, Motu Economic and Public Policy Research.
    5. Suzi Kerr, 2003. "Allocating Risks in a Domestic Greenhouse Gas Trading System," Others 0309003, University Library of Munich, Germany.
    6. John McMillan, 2004. "Quantifying creative destruction: Entrepreneurship and productivity in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 38(2), pages 153-173.
    7. Fabling, Richard & Grimes, Arthur, 2005. "Insolvency and economic development: Regional variation and adjustment," Journal of Economics and Business, Elsevier, vol. 57(4), pages 339-359.
    8. Arthur Grimes & Suzi Kerr & Andrew Aitken, 2004. "Bi-Directions Impacts of Economic, Social and Environmental Changes and the New Zealand Housing Market," Working Papers 04_09, Motu Economic and Public Policy Research.
    9. Arthur Grimes & Suzi Kerr & Andrew Aitken, 2003. "Housing and Economic Adjustment," Working Papers 03_09, Motu Economic and Public Policy Research.
    10. A.M.G Coleman & P.F.J Cruse & Rodger Greville & Alfred Y-T Wong & Arthur Grimes & Chris S. Meads, 1989. "Economic notes," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 52, December.
    11. Arthur Grimes & Andrew Aitken & Suzi Kerr, 2004. "House Price Efficiency: Expectations, Sales, Symmetry," Urban/Regional 0408001, University Library of Munich, Germany.
    12. Suzi Kerr & Emma Brunton & Ralph Chapman, 2004. "Policy to Encourage Carbon Sequestration in Plantation Forests," Working Papers 04_05, Motu Economic and Public Policy Research.
    13. Suzi Kerr & Catherine Leining, 2003. "Joint Implementation in Climate Change Policy," Working Papers 03_04, Motu Economic and Public Policy Research.
    14. Viv Hall & Angela Huang, 2004. "Would adopting the us dollar have led to improved inflation, output and trade balances, for New Zealand in the 1990s?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 38(1), pages 49-63.
    15. Suzi Kerr, 2003. "Motu, Excellence in Economic Research and the Challenges of 'Human Dimensions' Research," Working Papers 03_05, Motu Economic and Public Policy Research.
    16. Suzi Kerr & Susana Cardenas & Joanna Hendy, 2004. "Migration and the Environment in the Galapagos:An analysis of economic and policy incentives driving migration, potential impacts from migration control, and potential policies to reduce migration pre," Others 0403001, University Library of Munich, Germany.
    17. John Gibson, 2003. "Do Lower Expected Wage Benefits Explain Ethnic Gaps In Job- Related Training? Evidence From New Zealand," Labor and Demography 0310004, University Library of Munich, Germany.
    18. Suzi Kerr & Richard Newell & Jim Sanchirico, 2003. "Evaluating the New Zealand Individual Transferable Quota Market for Fisheries Management," Others 0309004, University Library of Munich, Germany.
    19. Suzie Ballantyne & Simon Chapple & David C. Maré & Jason Timmins, 2003. "Movements Into and Out of Child Poverty in New Zealand: Results from the Linked Income Supplement," Working Papers 03_13, Motu Economic and Public Policy Research.
    20. Dean R. Hyslop & David C. Maré, 2003. "Understanding New Zealand's Changing Income Distribution 1983-98: A Semiparametric Analysis," Working Papers 03_16, Motu Economic and Public Policy Research.
    21. Suzi Kerr & Andrew Aitken & Arthur Grimes, 2004. "Land Taxes and Revenue Needs as Communities Grow and Decline: Evidence from New Zealand," Working Papers 04_01, Motu Economic and Public Policy Research.
    22. Dave Maré & Jason Timmins, 2003. "Moving to Jobs?," Labor and Demography 0309003, University Library of Munich, Germany.
    23. Suzi Kerr & Shuguang Liu & Alexander S. P. Pfaff & R. Flint Hughes, 2003. "Carbon Dynamics and Land-Use Choices: Building a Regional-Scale Multidisciplinary Model," Working Papers 03_06, Motu Economic and Public Policy Research.
    24. Arthur Grimes, 2004. "New Zealand: A Typical Australasian Ecomony?," Working Papers 04_11, Motu Economic and Public Policy Research.
    25. Arthur Grimes & Robert Sourell & Andrew Aitken, 2005. "Regional Variation in Rental Costsfor Larger Households," Urban/Regional 0509014, University Library of Munich, Germany.
    26. Michael A. Kouparitsas, 2001. "Is the United States an optimum currency area? an empirical analysis of regional business cycles," Working Paper Series WP-01-22, Federal Reserve Bank of Chicago.
    27. Suzi Kerr, 2003. "Indigenous Forests and Forest Sink Policy in New Zealand," Working Papers 03_15, Motu Economic and Public Policy Research.
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    1. Grimes, Arthur, 2005. "Regional and industry cycles in Australasia: Implications for a common currency," Journal of Asian Economics, Elsevier, vol. 16(3), pages 380-397, June.
    2. Viv B. Hall & C. John McDermott, 2012. "Is there an unobserved components common cycle for Australasia? Implications for a common currency," New Zealand Economic Papers, Taylor & Francis Journals, vol. 46(2), pages 119-141, September.
    3. Viv Hall & John McDermott, 2008. "An Unobserved Components Common Cycle For Australia? Implications For A Common Currency," CAMA Working Papers 2008-11, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. Viv Hall & John McDermott, 2008. "An Unobserved Components Common Cycle For Australia? Implications For A Common Currency," CAMA Working Papers 2008-11, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    5. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, University Library of Munich, Germany.
    6. Sebastian Edwards, 2006. "External Imbalances in an Advanced, Commodity-Exporting Country: The Case of New Zealand," NBER Working Papers 12620, National Bureau of Economic Research, Inc.
    7. Arthur Grimes, 2007. "Trans-Tasman shocks: A mediating role for the NZDAUD," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(2), pages 237-250.

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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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