Has a structural break affected New Zealand business cycles?
By international standards, New Zealand’s recent business cycle fluctuations are remarkably volatile. Some bivariate regularities observed in developed economies are weak and sometime uncertain. Are these features endemic to New Zealand’s economy or the result of structural disturbances of the seventies? The paper reports that there are distinct signs of some structural break in the seventies, but the qualitative features of the business cycle are similar before and after any possible break. The reasons of these peculiarities then are to be sought in New Zealand’s own economic institutions.
Keywordsstructural break; economic conditions; monetary policy; business cycle; econometric model; Additive Outlier (AO); Innovational Outlier (IO); Gross Domestic Product (GDP)