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Growth in China and the US: Effects on a small commodity exporter economy

Citation

Osborn, DR and Vehbi, T, Growth in China and the US: Effects on a small commodity exporter economy, Economic Modelling, 45 pp. 268-277. ISSN 0264-9993 (2015) [Refereed Article]

Copyright Statement

2014 Elsevier B.V. All rights reserved.

DOI: doi:10.1016/j.econmod.2014.10.046

Abstract

This paper provides a comparative quantitative analysis of the relative effects of economic growth in the US and China on a small commodity exporting country, namely New Zealand. The framework is an SVAR model with an exogenous global block consisting of GDP growth in the two major international economies and world commodity price inflation; regional influences are controlled through the inclusion of Australian GDP growth, while the domestic block consists of GDP growth, inflation, interest rates and changes in the real exchange rate. Using a sample period from 1986 to 2011, we find that although growth spillovers to New Zealand GDP are substantially greater from the US than from China, nevertheless growth in China induces larger responses in the New Zealand real exchange rate than does the US. Commodity price responses to growth in each of the large economies are also explored, while time-varying estimates provide some evidence of increasing responses of commodity prices and the New Zealand real exchange rate to growth in China.

Item Details

Item Type:Refereed Article
Keywords:China, New Zealand, Australia, growth spillovers, commodity prices, real exchange rates
Research Division:Economics
Research Group:Applied Economics
Research Field:Macroeconomics (incl. Monetary and Fiscal Theory)
Objective Division:Economic Framework
Objective Group:Other Economic Framework
Objective Field:Economic Framework not elsewhere classified
Author:Osborn, DR (Professor Denise Osborn)
ID Code:109915
Year Published:2015
Web of Science® Times Cited:4
Deposited By:Tasmanian School of Business and Economics
Deposited On:2016-07-07
Last Modified:2017-02-15
Downloads:0

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