The economic performance of the New Zealand economy is something of an enigma. Although ranked nu... more The economic performance of the New Zealand economy is something of an enigma. Although ranked number one (of 144 countries) for four important 'growth fundamentals' New Zealand is 'middle of the pack' when it comes to economic growth, productivity and innovation. So what is missing in this story of New Zealand performance? Using three iterations (2005, 2007 and 2009) of the Business Operations Survey, the paper seeks to answer the question using a bivariate probit regression (biprobit) approach applied to samples in excess of 2,000 unit record observations of New Zealand firms. The results suggest that factors such as firm size, high perceived quality product, investment/R&D capability, major technology change, application of formal IP protection and new export markets are systematically and positively related to innovation; while many external issues such as those related to geography, market structure, business environment, appear to have little influence. At the firm level, innovations in New Zealand are highly dependent on the firms' internal ability to develop new technologies and market demand. (Small) size does matter in New Zealand where ultimately government may need to be involved to maintain a viable (minimum) scale for domestic R&D.
The paper explores the problems and challenges posed by the growth of the information and knowled... more The paper explores the problems and challenges posed by the growth of the information and knowledge economies for national accounting frameworks and measurements. The conventional approach has been to add to rather than reconstruct such indices. One of the consequences is the focus this leads to on “information technologies” and their prevalence and fails to fully appreciate the transformation that is required to enable “information” to be transformed into “new knowledge” and therefore create the “new economy. The paper argues for a recasting of the analysis of the new economy around an appreciation of the changing nature of physical capital brought about by the creation of new global data bases and transaction information. However alongside of this is an increased importance to intellectual assets, human and cultural capital and the rise of new networked relationships none of which are easily incorporated into national accounts
Introduction Both sustainability and well-being (SaW) are interdependent, inter-disciplinary, mul... more Introduction Both sustainability and well-being (SaW) are interdependent, inter-disciplinary, multi-dimensional, and international subject areas. However, people tend to interpret the subjects significantly differently based on their professional affiliation, academic background, geographical location etc., (Brunn, 2014; Roberts et al., 2013). A search of the SaW literature, using any scholarly search engine, generates results ranging from the thousands to millions creating a challenge for the researcher in picking the right papers; constructing a reasonable structure and synthesizing the vast material in order to conduct a comprehensive review of the literature. The work presented here relates to the use of a sophisticated method to exploit the explanatory power of metadata, attached to the results of a search query, to identify hidden patterns in the universe of given articles. The methods and metadata used to conduct the systematic analysis are briefly discussed under following h...
A nonlinear model of inflation and growth, with a fixed rate of money growth, is developed and it... more A nonlinear model of inflation and growth, with a fixed rate of money growth, is developed and its global dynamics analysed. These are compared with the local, linearised dynamics of the model. It is shown that the global dynamics of the model plausibly predict hyperinflationary bubbles, which are not present in the linearised version. Numerical simulations of the model are presented.
The implications of two different theoretical treatments of technology diffusion in an economy ar... more The implications of two different theoretical treatments of technology diffusion in an economy are considered; the traditional model of Solow (1956) and the alternative view of Carlaw, Lipsey and Bekar (2004). These two views articulate two general empirically testable hypotheses that are captured in a number of specific tests including measures of the diffusion of information and communication technologies (ICT). Although weak, the evidence supports the non-traditional view.
In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activi... more In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activities as part of an apparent livelihood transition strategy, despite the fact that most of the workforce depends upon farming. In this paper, we try to uncover insights into how livelihood assets, such as human capital, natural capital, economic capital, and locational characteristics, affect a household’s exit decision from on-farm to off-farm activities as a livelihood transition strategy in rural Pakistan. We analyzed data from 335 farming households from the second largest agricultural producing province in the country, Sindh. Our findings show that more than 19% of households have completely shifted from farming to off-farm activities. Furthermore, we identified that the ‘crop input credit’ is one of the major constraints to farmers converting their previous input-driven small loans into larger loans, where large markups may be imposed if they fail to pay when the harvest is made. Th...
In this paper we identify and interpret the evidence of physical stature among male New Zealander... more In this paper we identify and interpret the evidence of physical stature among male New Zealanders born during the late nineteenth century. Research in other countries in this period reveals a tendency for mean stature to decline and then, during, the early 20 century, a transition to increasing stature. We extend this research to New Zealand. Was there in New Zealand as elsewhere some tendency for height to diminish for those born before 1900? If there was a transition from stagnant or declining stature to rising heights, did it occur at roughly the same time in New Zealand as elsewhere? Can we identify particular groups within New Zealand which did not share equally in the experience of robust physical well-being? Are there socio-economic correlates that hint at the underlying causation for inequality and change over time?
In this paper we consider the forecasting performance of a range of semi- and non- parametric met... more In this paper we consider the forecasting performance of a range of semi- and non- parametric methods applied to high frequency electricity price data. Electricity price time-series data tend to be highly seasonal, mean reverting with price jumps/spikes and time- and price-dependent volatility. The typical approach in this area has been to use a range of tools that have proven popular in the financial econometrics literature, where volatility clustering is common. However, electricity time series tend to exhibit higher volatility on a daily basis, but within a mean reverting framework, albeit with occasional large ’spikes’. In this paper we compare the existing forecasting performance of some popular parametric methods, notably GARCH AR-MAX, with approaches that are new to this area of applied econometrics, in particular, Artificial Neural Networks (ANN); Linear Regression Trees, Local Regressions and Generalised Additive Models. Section 2 presents the properties and definitions of ...
Two different theoretical treatments of technology diffusion in an economy are examined. The trad... more Two different theoretical treatments of technology diffusion in an economy are examined. The traditional model based on the aggregate production function approach first introduced by Solow (1957) assumes technology is unstructured and arrives as a continuous exogenous flow. This model predicts that the diffusion of new technologies will be contemporaneously correlated with growth in economic performance indicators. An alternative view explicitly models technological structure in the form of complementarities. It also incorporates the observation that new general purpose technologies (GPTs) invariably emerge in a crude form lacking many of the complementarities that enable them to become productive. This view predicts that when new technologies emerge costly investment in developing complementary technologies must take place and thus there will be a lag between the new technology’s introduction and observed growth in economic performance indicators. These two views articulate two g...
Human capital is increasingly believed to play an important role in the growth process, however, ... more Human capital is increasingly believed to play an important role in the growth process, however, adequately measuring its stock remains controversial. This paper identifies three general approaches to human capital measurement; cost-based, income-based and education-based, and presents a critical review of the theories and their applications to data from a range of countries. Emphasis on empirical evidence will be given to the case of New Zealand.
In this paper we will use case studies to seek to understand the dynamic innovation processes at ... more In this paper we will use case studies to seek to understand the dynamic innovation processes at the level of the firm and to explain the apparent 'enigma' between New Zealand's recent innovation performance and economic growth. A text-mining tool, Leximancer, (version 4) was used to analyse the case results, based on content analysis. The case studies reveal that innovation in New Zealand firms can be best described as 'internalised', and the four key factors that affect innovation in New Zealand firms are ‘Product’, ‘Market’, ‘People’ and ‘Money’. New Zealand may be an ideal place for promoting local entrepreneurship, however, many market/technology opportunities cannot be realized in such a small and isolated economy, hence the poor economic performance.
It is now recognized that long memory and structural change can easily be confused because the st... more It is now recognized that long memory and structural change can easily be confused because the statistical properties of times series of lengths typical of nancial and econometric series are similar for both models. The implications of long memory models or short memory with breaks for the pricing of nancial assets (e.g. options) have been studied by other authorities who have concluded the pricing is signicantly dierent between the two classes of models. Option pricing is also of interest to regulatory authorities. Thus it is of interest both from a nance theory and regulatory point of view whether the data are generated by a true long memory process or by something else. We propose a new approach aimed at distinguishing between long memory and structural change. The approach, which utilizes the computational ecient methods based upon Atheoretical Regression Trees (ART), uses a null hypothesis of the data being a fractionally integrated series. It establishes through simulation the...
In this study, we empirically investigate evidence of explosive behaviour in the British share pr... more In this study, we empirically investigate evidence of explosive behaviour in the British share prices of canals, railways and waterworks in the nineteenth century using the right-tailed unit root test of Phillips, Shi and Yu (2015, PSY). Of particular interest to the Railway Mania in the 1840s, our results provide evidence of exuberance in share prices of railways during the most remarkable events in history. In addition, we find signs of exuberance in canals and waterworks share prices. Our findings will be of great interest to both economic historians and scholars who are interested in the rage of speculation in historical share prices during the Railway Mania.
Applying the methods of Phillips, Shi and Yu (2015, PSY), evidence of exuberance in share prices ... more Applying the methods of Phillips, Shi and Yu (2015, PSY), evidence of exuberance in share prices is confirmed for the Mississippi Company and South Sea Company, and for a number of other 18th century financial organisations, for the first time. There are signs of possible contagion in these historical shares.
The paper discusses the construction of a new Consumer Price Index (CPI) for New Zealand, 1885-19... more The paper discusses the construction of a new Consumer Price Index (CPI) for New Zealand, 1885-1913, based upon aggregation of data from the four largest provincial districts: Auckland, Canterbury, Otago and Wellington. Using these new provincial data, we explore the degree of market integration within the New Zealand dairy and meat sectors, and consider whether anecdotal evidence on South-North price convergence is supported statistically.
The world has embraced a set of concepts (knowledge driven growth) which are seen as the 'cor... more The world has embraced a set of concepts (knowledge driven growth) which are seen as the 'core of future growth and wellbeing' without any commonly agreed notion of what they are, how they might be measured, and crucially therefore, how they actually do (or might) affect economic growth and social wellbeing. The theory of how the mechanism works lacks important detail.
jennifer.brown@cantebury.ac.nzAbstract:We present the results of a simulation study into the prop... more jennifer.brown@cantebury.ac.nzAbstract:We present the results of a simulation study into the properties of 12different estimators of the Hurst parameter, H, or the fractional integra-tion parameter, d, in long memory time series. We compare and contrasttheir performance on simulated Fractional Gaussian Noises and fractionallyintegrated series with lengths between 100 and 10,000 data points and Hvalues between 0.55 and 0.90 or d values between 0.05 and 0.40. We applyall 12 estimators to the Campito Mountain data and estimate the accuracyof their estimates using the Beran goodness of fit test for long memory timeseries.MCS code: 37M10Keywords and phrases: Strong dependence, Global dependence, Longrange dependence, Hurst parameter estimators.
In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activi... more In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activities as part of an apparent livelihood transition strategy, despite the fact that most of the workforce depends upon farming. In this paper, we try to uncover insights into how livelihood assets, such as human capital, natural capital, economic capital, and locational characteristics, affect a household's exit decision from on-farm to off-farm activities as a livelihood transition strategy in rural Pakistan. We analyzed data from 335 farming households from the second largest agricultural producing province in the country, Sindh. Our findings show that more than 19% of households have completely shifted from farming to off-farm activities. Furthermore, we identified that the 'crop input credit' is one of the major constraints to farmers converting their previous input-driven small loans into larger loans, where large markups may be imposed if they fail to pay when the harvest is made. The empirical findings from Binary Logistic Regression provide strong evidence for family labor characteristics, particularly for working-age males, working-age females, and working-age children. Surprisingly, the cultivated land size significantly and positively influences farm exit rather than a continuation of farming. Off-farm employment, exogenous shocks, and urbanization also significantly and positively influenced the decision to transition into off-farm work. In contrast, the age of the household head, livestock ownership, and distance to a commercial zone significantly inhibited the decision to exit farming. However, government assistance, including subsidies, strongly encouraged farmers to continue farming. These findings provide new insights into the factors affecting the drivers of both exit and continuation in the farming sector as part of a long-term livelihood transition strategy.
The economic performance of the New Zealand economy is something of an enigma. Although ranked nu... more The economic performance of the New Zealand economy is something of an enigma. Although ranked number one (of 144 countries) for four important 'growth fundamentals' New Zealand is 'middle of the pack' when it comes to economic growth, productivity and innovation. So what is missing in this story of New Zealand performance? Using three iterations (2005, 2007 and 2009) of the Business Operations Survey, the paper seeks to answer the question using a bivariate probit regression (biprobit) approach applied to samples in excess of 2,000 unit record observations of New Zealand firms. The results suggest that factors such as firm size, high perceived quality product, investment/R&D capability, major technology change, application of formal IP protection and new export markets are systematically and positively related to innovation; while many external issues such as those related to geography, market structure, business environment, appear to have little influence. At the firm level, innovations in New Zealand are highly dependent on the firms' internal ability to develop new technologies and market demand. (Small) size does matter in New Zealand where ultimately government may need to be involved to maintain a viable (minimum) scale for domestic R&D.
The paper explores the problems and challenges posed by the growth of the information and knowled... more The paper explores the problems and challenges posed by the growth of the information and knowledge economies for national accounting frameworks and measurements. The conventional approach has been to add to rather than reconstruct such indices. One of the consequences is the focus this leads to on “information technologies” and their prevalence and fails to fully appreciate the transformation that is required to enable “information” to be transformed into “new knowledge” and therefore create the “new economy. The paper argues for a recasting of the analysis of the new economy around an appreciation of the changing nature of physical capital brought about by the creation of new global data bases and transaction information. However alongside of this is an increased importance to intellectual assets, human and cultural capital and the rise of new networked relationships none of which are easily incorporated into national accounts
Introduction Both sustainability and well-being (SaW) are interdependent, inter-disciplinary, mul... more Introduction Both sustainability and well-being (SaW) are interdependent, inter-disciplinary, multi-dimensional, and international subject areas. However, people tend to interpret the subjects significantly differently based on their professional affiliation, academic background, geographical location etc., (Brunn, 2014; Roberts et al., 2013). A search of the SaW literature, using any scholarly search engine, generates results ranging from the thousands to millions creating a challenge for the researcher in picking the right papers; constructing a reasonable structure and synthesizing the vast material in order to conduct a comprehensive review of the literature. The work presented here relates to the use of a sophisticated method to exploit the explanatory power of metadata, attached to the results of a search query, to identify hidden patterns in the universe of given articles. The methods and metadata used to conduct the systematic analysis are briefly discussed under following h...
A nonlinear model of inflation and growth, with a fixed rate of money growth, is developed and it... more A nonlinear model of inflation and growth, with a fixed rate of money growth, is developed and its global dynamics analysed. These are compared with the local, linearised dynamics of the model. It is shown that the global dynamics of the model plausibly predict hyperinflationary bubbles, which are not present in the linearised version. Numerical simulations of the model are presented.
The implications of two different theoretical treatments of technology diffusion in an economy ar... more The implications of two different theoretical treatments of technology diffusion in an economy are considered; the traditional model of Solow (1956) and the alternative view of Carlaw, Lipsey and Bekar (2004). These two views articulate two general empirically testable hypotheses that are captured in a number of specific tests including measures of the diffusion of information and communication technologies (ICT). Although weak, the evidence supports the non-traditional view.
In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activi... more In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activities as part of an apparent livelihood transition strategy, despite the fact that most of the workforce depends upon farming. In this paper, we try to uncover insights into how livelihood assets, such as human capital, natural capital, economic capital, and locational characteristics, affect a household’s exit decision from on-farm to off-farm activities as a livelihood transition strategy in rural Pakistan. We analyzed data from 335 farming households from the second largest agricultural producing province in the country, Sindh. Our findings show that more than 19% of households have completely shifted from farming to off-farm activities. Furthermore, we identified that the ‘crop input credit’ is one of the major constraints to farmers converting their previous input-driven small loans into larger loans, where large markups may be imposed if they fail to pay when the harvest is made. Th...
In this paper we identify and interpret the evidence of physical stature among male New Zealander... more In this paper we identify and interpret the evidence of physical stature among male New Zealanders born during the late nineteenth century. Research in other countries in this period reveals a tendency for mean stature to decline and then, during, the early 20 century, a transition to increasing stature. We extend this research to New Zealand. Was there in New Zealand as elsewhere some tendency for height to diminish for those born before 1900? If there was a transition from stagnant or declining stature to rising heights, did it occur at roughly the same time in New Zealand as elsewhere? Can we identify particular groups within New Zealand which did not share equally in the experience of robust physical well-being? Are there socio-economic correlates that hint at the underlying causation for inequality and change over time?
In this paper we consider the forecasting performance of a range of semi- and non- parametric met... more In this paper we consider the forecasting performance of a range of semi- and non- parametric methods applied to high frequency electricity price data. Electricity price time-series data tend to be highly seasonal, mean reverting with price jumps/spikes and time- and price-dependent volatility. The typical approach in this area has been to use a range of tools that have proven popular in the financial econometrics literature, where volatility clustering is common. However, electricity time series tend to exhibit higher volatility on a daily basis, but within a mean reverting framework, albeit with occasional large ’spikes’. In this paper we compare the existing forecasting performance of some popular parametric methods, notably GARCH AR-MAX, with approaches that are new to this area of applied econometrics, in particular, Artificial Neural Networks (ANN); Linear Regression Trees, Local Regressions and Generalised Additive Models. Section 2 presents the properties and definitions of ...
Two different theoretical treatments of technology diffusion in an economy are examined. The trad... more Two different theoretical treatments of technology diffusion in an economy are examined. The traditional model based on the aggregate production function approach first introduced by Solow (1957) assumes technology is unstructured and arrives as a continuous exogenous flow. This model predicts that the diffusion of new technologies will be contemporaneously correlated with growth in economic performance indicators. An alternative view explicitly models technological structure in the form of complementarities. It also incorporates the observation that new general purpose technologies (GPTs) invariably emerge in a crude form lacking many of the complementarities that enable them to become productive. This view predicts that when new technologies emerge costly investment in developing complementary technologies must take place and thus there will be a lag between the new technology’s introduction and observed growth in economic performance indicators. These two views articulate two g...
Human capital is increasingly believed to play an important role in the growth process, however, ... more Human capital is increasingly believed to play an important role in the growth process, however, adequately measuring its stock remains controversial. This paper identifies three general approaches to human capital measurement; cost-based, income-based and education-based, and presents a critical review of the theories and their applications to data from a range of countries. Emphasis on empirical evidence will be given to the case of New Zealand.
In this paper we will use case studies to seek to understand the dynamic innovation processes at ... more In this paper we will use case studies to seek to understand the dynamic innovation processes at the level of the firm and to explain the apparent 'enigma' between New Zealand's recent innovation performance and economic growth. A text-mining tool, Leximancer, (version 4) was used to analyse the case results, based on content analysis. The case studies reveal that innovation in New Zealand firms can be best described as 'internalised', and the four key factors that affect innovation in New Zealand firms are ‘Product’, ‘Market’, ‘People’ and ‘Money’. New Zealand may be an ideal place for promoting local entrepreneurship, however, many market/technology opportunities cannot be realized in such a small and isolated economy, hence the poor economic performance.
It is now recognized that long memory and structural change can easily be confused because the st... more It is now recognized that long memory and structural change can easily be confused because the statistical properties of times series of lengths typical of nancial and econometric series are similar for both models. The implications of long memory models or short memory with breaks for the pricing of nancial assets (e.g. options) have been studied by other authorities who have concluded the pricing is signicantly dierent between the two classes of models. Option pricing is also of interest to regulatory authorities. Thus it is of interest both from a nance theory and regulatory point of view whether the data are generated by a true long memory process or by something else. We propose a new approach aimed at distinguishing between long memory and structural change. The approach, which utilizes the computational ecient methods based upon Atheoretical Regression Trees (ART), uses a null hypothesis of the data being a fractionally integrated series. It establishes through simulation the...
In this study, we empirically investigate evidence of explosive behaviour in the British share pr... more In this study, we empirically investigate evidence of explosive behaviour in the British share prices of canals, railways and waterworks in the nineteenth century using the right-tailed unit root test of Phillips, Shi and Yu (2015, PSY). Of particular interest to the Railway Mania in the 1840s, our results provide evidence of exuberance in share prices of railways during the most remarkable events in history. In addition, we find signs of exuberance in canals and waterworks share prices. Our findings will be of great interest to both economic historians and scholars who are interested in the rage of speculation in historical share prices during the Railway Mania.
Applying the methods of Phillips, Shi and Yu (2015, PSY), evidence of exuberance in share prices ... more Applying the methods of Phillips, Shi and Yu (2015, PSY), evidence of exuberance in share prices is confirmed for the Mississippi Company and South Sea Company, and for a number of other 18th century financial organisations, for the first time. There are signs of possible contagion in these historical shares.
The paper discusses the construction of a new Consumer Price Index (CPI) for New Zealand, 1885-19... more The paper discusses the construction of a new Consumer Price Index (CPI) for New Zealand, 1885-1913, based upon aggregation of data from the four largest provincial districts: Auckland, Canterbury, Otago and Wellington. Using these new provincial data, we explore the degree of market integration within the New Zealand dairy and meat sectors, and consider whether anecdotal evidence on South-North price convergence is supported statistically.
The world has embraced a set of concepts (knowledge driven growth) which are seen as the 'cor... more The world has embraced a set of concepts (knowledge driven growth) which are seen as the 'core of future growth and wellbeing' without any commonly agreed notion of what they are, how they might be measured, and crucially therefore, how they actually do (or might) affect economic growth and social wellbeing. The theory of how the mechanism works lacks important detail.
jennifer.brown@cantebury.ac.nzAbstract:We present the results of a simulation study into the prop... more jennifer.brown@cantebury.ac.nzAbstract:We present the results of a simulation study into the properties of 12different estimators of the Hurst parameter, H, or the fractional integra-tion parameter, d, in long memory time series. We compare and contrasttheir performance on simulated Fractional Gaussian Noises and fractionallyintegrated series with lengths between 100 and 10,000 data points and Hvalues between 0.55 and 0.90 or d values between 0.05 and 0.40. We applyall 12 estimators to the Campito Mountain data and estimate the accuracyof their estimates using the Beran goodness of fit test for long memory timeseries.MCS code: 37M10Keywords and phrases: Strong dependence, Global dependence, Longrange dependence, Hurst parameter estimators.
In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activi... more In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activities as part of an apparent livelihood transition strategy, despite the fact that most of the workforce depends upon farming. In this paper, we try to uncover insights into how livelihood assets, such as human capital, natural capital, economic capital, and locational characteristics, affect a household's exit decision from on-farm to off-farm activities as a livelihood transition strategy in rural Pakistan. We analyzed data from 335 farming households from the second largest agricultural producing province in the country, Sindh. Our findings show that more than 19% of households have completely shifted from farming to off-farm activities. Furthermore, we identified that the 'crop input credit' is one of the major constraints to farmers converting their previous input-driven small loans into larger loans, where large markups may be imposed if they fail to pay when the harvest is made. The empirical findings from Binary Logistic Regression provide strong evidence for family labor characteristics, particularly for working-age males, working-age females, and working-age children. Surprisingly, the cultivated land size significantly and positively influences farm exit rather than a continuation of farming. Off-farm employment, exogenous shocks, and urbanization also significantly and positively influenced the decision to transition into off-farm work. In contrast, the age of the household head, livestock ownership, and distance to a commercial zone significantly inhibited the decision to exit farming. However, government assistance, including subsidies, strongly encouraged farmers to continue farming. These findings provide new insights into the factors affecting the drivers of both exit and continuation in the farming sector as part of a long-term livelihood transition strategy.
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Papers by Leslie Oxley