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An Empirical Investigation of sectoral-Level Capital Investments in New Zealand

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Abstract

I extend the Glick and Rogoff (1995) aggregate time-series, empirical, intertemporal model of country-investment (and the current account) to a sectoral-level, and estimate it for New Zealand. I fit the model to panel data of eleven industries from 1988-2009. The sectoral-level investment growth is a function of lagged investment level, sector-specific TFP shocks, country-specific TFP shocks, and global TFP shocks. The estimates seem robust to government spending shocks and Terms of Trade shocks.

Suggested Citation

  • Weshah Razzak, 2014. "An Empirical Investigation of sectoral-Level Capital Investments in New Zealand," Treasury Working Paper Series 14/04, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:14/04
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    File URL: https://treasury.govt.nz/sites/default/files/2014-02/twp14-04.pdf
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    References listed on IDEAS

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    1. Robert Shimer, 2009. "Convergence in Macroeconomics: The Labor Wedge," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 280-297, January.
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    More about this item

    Keywords

    Investments; sectoral-level; TFP shocks; panel data;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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