WORLD.MACRO: Regime Shifts and Fast Recovery on the Periphery: New Zealand in the 1930s

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                ABSTRACTS IN ECONOMIC HISTORY
                     (c) 2001 EH.Net
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Name: David Greasley
Email: David.Greasley@ed.ac.uk
Institution: University of Pittsburgh

Co-author: Les Oxley
Dept of Economics
University of Waikato
Hamilton
New Zealand

Title: Regime Shifts and Fast Recovery on the Periphery: New Zealand
in the 1930s

Internet Address of abstracted work: not available

By mail:
Dept. of Economic History
Edinburgh University
50 George Square, Edinburgh EH8 9JY
Scotland
Phone: +44 131 650 3838
Fax: +44 131 650 6645

Language: English

Abstract:
New Zealand's monetary regime changed fundamentally in the early
1930s as the conventional parity of her pound and sterling was
broken, the ties with Australia's banking system were lessened, and
the Reserve Bank of New Zealand established. The consequences of this
regime shift for economic recovey, which new data show was remarkably
fast in New Zealand, are investigated using two counterfactuals. One
of these assumes that New Zealand followed Australia's monetary
experience through the 1930s, the other that the pre-1930 regime
persisted. Long-standing, cointegrating relationships between New
Zealand M1 and her overseas trade, between New Zealand and UK prices,
and between New Zealand and Australian velocity break down around
1930. The end of the old regime heralded faster monetary and real GDP
growth.The devalution of 1933 was accompanied by legislation which
immobilized New Zealand's rising sterling reserves, but the
deleterioue effects were unwound when the Reserve Bank commenced
operations in 1934, and monetary growth accelerated.

Bibliography: Greasley, David and Oxley, Les. "Regime Shifts and Fast
Recovery on the Periphery: New Zealand in the 1930s." Manuscript,
Edinburgh University and Waikato University, 2001.

Subject: V
Geographical Area: 3
Country/Region: New Zealand
Time Period: 8

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