New Working Papers on Terms of Trade and Impacts of Ill Health

The Treasury published two new Working Papers today, covering impacts from chronic and acute health conditions and analysis of terms of trade.

The new Working Papers are:

• The Employment and Income Effects of Eight Chronic and Acute Health Conditions, by Sylvia Dixon. This paper examines the impact of eight different health conditions on the employment rates and incomes of working-aged New Zealanders who develop them. The conditions studied are stroke, traumatic brain injury, coronary heart disease, diabetes, chronic obstructive pulmonary disease (COPD), breast cancer, melanoma, and prostate cancer. The paper finds evidence of significant employment rate reductions, income support increases, and income losses in the four years after first diagnosis for six of the eight conditions (stroke, traumatic brain injury, coronary heart disease, diabetes, COPD and breast cancer).

• Decomposing New Zealand’s Terms of Trade, by Phillip Mellor. This paper adds to the understanding of how New Zealand’s terms of trade have evolved since 1991. The paper develops a method to decompose the percentage change in the terms of trade into the contributions from different export and import components. Three key insights emerge from applying the decomposition to New Zealand. Firstly, the decomposition supports the view that increasing export prices have made the largest contribution to gains in the terms of trade over the past two decades. Secondly, the change in the composition of the import basket is shown to have made a material positive contribution to gains in the terms of trade. Import prices have been a drag on the terms of trade over longer timeframes, although in recent years they have made a positive contribution. Finally the paper does not find a material impact from the change in the composition of exports over time.

These Working Papers can be viewed on the Treasury website at http://www.treasury.govt.nz/publications/research-policy/wp.

The views, opinions, findings, and conclusions or recommendations expressed in Treasury Working Papers are strictly those of the authors and do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government.

ENDS

© Scoop Media