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Working paper

How Many Jobs? A Leading Indicator Model of New Zealand Employment (WP 02/13)

Issue date: 
Saturday, 1 June 2002
Status: 
Current
View point: 
Publication category: 
JEL classification: 
C53 - Forecasting Models; Simulation Methods
E37 - Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications

Formats and related files

This paper constructs a composite index of leading indicators of New Zealand employment.

Abstract

This paper constructs a composite index of leading indicators of New Zealand employment. The choice of variables and their weights in the composite index are determined by their concordance with employment. The composite index is included in an indicator model to forecast quarterly employment growth. The indicator model explains about 67 percent of the quarterly variation in employment, in sample, and correctly predicted the direction of next period employment almost 80 percent of the time, out of sample.

Acknowledgements

We would like to thank Richard Downing, Leo Krippner and Robert Lamy for valuable comments and Joanne Archibald for helpful suggestions about the data. The paper has also benefited from comments by participants of a seminar at the Reserve Bank of New Zealand and the 2001 Australasian Macroeconomic Workshop in Adelaide and two anonymous referees.

Disclaimer

The views expressed in this Working Paper are those of the author(s) and do not necessarily reflect the views of the New Zealand Treasury. The paper is presented not as policy advice, but with a view to inform and stimulate wider debate.

Last updated: 
Tuesday, 23 October 2007