سواری رایگان: قوانین و مقررات تجاری، نوسانات و رشد GDP

International evidence indicates that higher terms of trade levels and lower terms of trade volatility contribute to enhanced growth outcomes, especially for commodity-export and developing countries. New Zealand's terms of trade have been high and remarkably stable since the early 1990s compared with past experience. We analyse the proximate reasons behind these high, stable terms of trade and then examine whether this terms of trade behaviour explains growth outcomes since 1960. Attention is paid to growth outcomes over a variety of economic regimes. Approximately half the variance in annual GDP growth over 45 years can be explained by the level and volatility of the terms of trade. The relationship is robust across four economic regimes.

Econometric analysis in Buckle, Haugh and Thomson (2004) indicates that “New Zealand GDP growth experienced an unusually long period of time in high growth and low volatility regimes during the 1990s.” This conclusion built on the work of an earlier paper, Buckle, Haugh and Thomson (2003), that decomposed the GDP growth rate by sector, concluding that “the principal explanation for the decline in GDP volatility is a decline in the Services and Manufacturing sector production growth variances.” While the decline in Services and Manufacturing growth rate variances arithmetically may be the cause of the decline in GDP volatility over the past decade, the study notes that they are not necessarily the causal factor behind the smoother growth rate. A number of prior studies indicate that the terms of trade (ratio of export prices to import prices) are a key determinant of New Zealand cycles (e.g. Easton, 1997; Wells & Evans, 1985). This relationship is likely to reflect the importance of agricultural commodity exports within New Zealand's economy. A rise (fall) in export prices relative to import prices raises (lowers) returns to producers, so raising (lowering) capital investment and production within the economy. The effect is similar to a discrete change in total factor productivity since real producer returns (expressed as a ratio of consumer prices) are raised for a given level of inputs. Internationally, there is evidence that the level and volatility of the terms of trade are important determinants of economic cycles and of longer term growth trends in many small open economies, particularly developing countries and commodity-producing developed countries. Our purpose here is to subject the relationship between New Zealand's terms of trade and the country's GDP growth rate to empirical test. Before doing so, we need to understand why the terms of trade may affect a country's economic performance. We draw on recent theoretical contributions in development economics and also on cross-country studies of economic performance. In the former group, two studies stand out: Hsieh and Klenow (2003) and Caselli and Feyrer (2005). Hsieh and Klenow confirm the standard positive relationship between physical capital intensity and per capita incomes across countries. Using their own estimates, and citing the work of Eaton and Kortum (2001), they find that prices of imported capital goods do not explain the bulk of capital intensity differences across countries. Instead they find that consumption prices differ markedly internationally, being low in poor countries. Building on this work, Caselli and Feyrer find that marginal revenue products tend to be equalised across countries more than do marginal physical products. They state (p. 19): “One way to put this is to say that the main reason for capital's failure to flow to poor countries is that what it produces there is of little value, compared to the cost of installation.” A corollary of this finding is that a country's terms of trade are as important as its multifactor productivity in determining capital investment and production. A rise in the terms of trade induces greater capital investment and thence an increase in output. In a dynamic setting, high terms of trade lead to an increase in the growth rate for as long as the flow of extra new investment required to build the capital stock to the new equilibrium occurs. In practice, for sizeable changes in the terms of trade, this may yield a prolonged positive relationship between the level of the terms of trade and the country's growth rate. This relationship is further strengthened if net migration flows respond positively to the level of the terms of trade. Traditional empirical analyses covering the relationship between the terms of trade and economic performance find that an adverse terms of trade shock depresses real demand and real incomes, resulting in lower growth (Barro & Sala-i-Martin, 1995; Bloomfield, 1984 and Easterly et al., 1993; Lutz & Singer, 1994). More recent analyses (Broda, 2001 and Edwards and Yeyati, 2003) suggest that this effect is particularly relevant under fixed exchange rate regimes, but is mitigated when a country has a floating exchange rate since the real income effects are cushioned through exchange rate adjustment. In addition to the level of the terms of trade, volatility in the terms of trade may be important. Turnovsky and Chattopadhyay (2003), building on the analysis of Ramey and Ramey (1995), theorise that various sources of volatility, including terms of trade volatility, can affect the equilibrium growth rate. The volatility may reduce capital intensity, especially where a country faces an upward sloping supply of capital. Their empirical work finds that terms of trade volatility has a statistically significant negative impact on the growth rate across a sample of 61 developing countries. The mean growth rate of the terms of trade has a weak positive impact on the mean economic growth rate. Mendoza (1997) also finds that higher terms of trade volatility has a negative impact on a country's economic growth rate. Across his sample of 9 industrial and 31 developing countries, he finds that growth is slower in countries with higher terms of trade volatility. This result is robust to a number of different specifications. Mendoza hypothesises that the terms of trade volatility affects savings behaviour and thence growth. As with Turnovsky and Chattopadhyay, he finds also that the growth in the terms of trade affects the mean growth rate. Blattman, Hwang and Williamson (2004) examine these issues using a much earlier, but longer, historical timeframe: 1870–1939. They note that terms of trade volatility can impact negatively on investment rates and hence on economic growth. Over a long period, differences in terms of trade volatility explain a substantial portion of the divergence in per capita income levels between countries in the core of the world economy (which had low terms of trade volatility) relative to those in the periphery (high volatility). Growth in the terms of trade is also found to impact on economic growth rates across the same sample of countries. Together, this collection of results suggests that a country with volatile terms of trade will tend to have lower investment rates, lower capital stock and lower economic growth than a country with less terms of trade volatility. The level (or growth) in the terms of trade additionally impacts on producer incomes and thence on investment rates, so terms of trade trends themselves (separate from the volatility) can impact on GDP growth. While these results are often described on a cross-country basis, they also apply to changes in the terms of trade (level and volatility) within a single country across a long stretch of time. In contrast to the cross-country studies cited above, we examine whether the level and volatility of the terms of trade impact on the GDP growth rate of a single country over the post-war period. This enables us to take the insights of the cross-country studies and analyse the issues with attention to greater country-specific detail than can be achieved in those studies. Specifically, we examine the relationship between the terms of trade and economic growth for New Zealand, a small, primary-producing developed country. One advantage of doing so is that we can abstract from factors that vary across countries but that do not vary materially over time within a country. Much of the cross-country growth literature (including many of the studies cited above) emphasises the important roles of institutions, education, skills, etc., for explaining why some countries grow faster than others. These factors tend to be relatively stable over time within a developed country such as New Zealand. We can therefore concentrate, in a time series study, on factors that vary strongly over time, since it is these latter factors that will dominate cyclical outcomes. The major such factor in a primary producing country is the terms of trade. Section 2 of the paper provides a detailed examination of developments in New Zealand's post-war terms of trade. We analyse developments in the aggregate terms of trade and, for a more recent period, developments in disaggregated terms of trade components. This analysis is relevant to understanding New Zealand's recent outcomes since New Zealand has had relatively high and stable terms of trade since the early 1990s. We then examine whether New Zealand's terms of trade behaviour is able to explain the country's key growth outcomes since 1960. Particular attention is paid to growth outcomes over a variety of economic regimes to check that the relationships are robust. Consistent with the international evidence, we find that terms of trade developments explain a considerable portion of New Zealand's growth performance across a range of economic regimes.

International evidence pertaining especially to commodity-producing and developing countries indicates that terms of trade behaviour can have an important impact on GDP growth outcomes. Each of higher terms of trade levels and lower terms of trade volatility have been estimated internationally to contribute to enhanced growth outcomes. New Zealand has had a long history of volatile terms of trade; however, the country's terms of trade since the early 1990s have been at a high level relative to history, and have been remarkably stable compared with past experience. This paper analysed the proximate reasons determining New Zealand's high and relatively stable terms of trade since the early 1990s. It then examined whether New Zealand's terms of trade behaviour is able to explain the country's growth outcomes since 1960. Attention has been paid to growth outcomes over a variety of economic regimes (to check that the relationships are robust) and to outcomes in recent years to determine whether recent growth behaviour is unusual once terms of trade influences are taken into account. We find that the rise in New Zealand's commodity terms of trade since the early 1990s is due largely to real price rises in key agricultural commodity exports, especially meat and, to a lesser extent, dairy. Diversification out of these commodities over prior decades has had the effect of reducing the terms of trade relative to what would have occurred had the export product mix stayed as it was in the early 1970s. However, diversification of exports out of wool (which has had poorly performing prices) has had a positive effect on the terms of trade level. Overall, diversification of the export mix has had the effect of reducing volatility in the overall terms of trade. Reduced volatility in individual commodity prices has also had some impact in reducing terms of trade volatility, but this latter effect is relatively small. The key trends in New Zealand's growth experience over the 45 years from 1960 to 2004 can be explained well by two terms of trade related factors: the level of the terms of trade and volatility in real import prices. The latter, in part, reflects the impact of volatility in oil prices. The former reflects the level effects of import prices (including oil prices) as well as the effects of changes in commodity export prices. Approximately half of the (smoothed) annual growth rate of GDP over the past 45 years can be explained by these two variables. The relationship is robust across four different economic regimes through the period. The end-of-sample GDP growth behaviour can be explained statistically almost completely through the impact of the two terms of trade factors. The findings are useful in informing policy development relating to economic growth. First, the results imply that New Zealand's growth performance is still heavily dependent on external factors impacting on the economy via export and import prices. There is no need to resort to evidence of structural breaks in the growth process to explain New Zealand's strong GDP growth since 2001. High commodity terms of trade and low terms of trade volatility (especially in import prices) can explain recent growth outcomes. Second, positive price trends in the traditional agricultural commodity exports of meat and dairy (but not wool) explain much of the positive terms of trade performance over recent years. It is dangerous to extrapolate past price trends into the future, especially for commodities. In a backward-looking sense, however, New Zealand has apparently benefited by retaining a strong reliance on traditional commodities as a major source of export revenue.