Cover IMF Working Papers
Potential Growth of Australia and New Zealand in the Aftermath of the Global Crisis
Author: Ms. Yan M Sun
Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 127
Language:
English
Publication Date:
01 May 2010
DOI:
https://doi.org/10.5089/9781455200863.001
ISBN:
9781455200863
ISSN:
1018-5941
Pages:
22
Keywords:
WP; Australia; cost of capital; capital; investment; equilibrium capital-output ratio
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Using a production function method, this paper assesses the impact of the global crisis on the potential growth of Australia and New Zealand. The two countries have not been hit hard by the global crisis, but have large net external liabilities. The paper finds that the main negative impact of the global crisis is likely to come through higher costs of capital, offset partly by a higher return to capital from strong demand for commodities by emerging Asia. It estimates medium-term potential growth of about 3 percent for Australia and 2. percent for New Zealand, higher than that of many other advanced economies.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund