Would adopting the Australian dollar provide superior monetary policy in New Zealand?

Counterfactual experiments with the Reserve Bank of New Zealand's core model provide some insight into the implications for New Zealand's economic performance over the 1990s, had it credibly fixed its currency to the Australian dollar. If New Zealand had faced the relatively more stimulatory Australian monetary conditions prevailing over the 1990s, then output growth may have been temporarily boosted. However, demand pressures would have probably been greater and inflation higher. In particular, results suggest that over the latter part of the 1990s annual inflation would have been approximately 1% point higher on average. Stochastic simulation experiments provide a vehicle to analyse what the implications of currency union might be more generally. Results suggest that if New Zealand were to lose its ability to set monetary policy independent of that set in Australia, then the variability of inflation and output would increase over the business cycle.     

The Development and Interim Validation of A Dimensions-Based Senior Management Assessment Centre

Hugh McCredie, Group Staff Manager of Glynwed International, and Viv Shackleton, Senior Lecturer in Work Psychology at Aston Business School, describe the design of a dimensionally based assessment centre for potential general managers and give an interim evaluation of the centre's operation. While confirming some of the doubts expressed by critics about the usefulness of such dimensions in arriving at overall assessment ratings, they make a case for their value in terms of longer term career progression and training/development action arising out of attendance at the centre.     

Management development within the construction industry: building on success?

This article explores the notion that the workplace is a learning environment, and that the line manager is a key player determining its effectiveness. The work discusses how performance management systems may be used to clarify expectations made of line managers with regard to employee development. The work, in addition, suggests that line manager people management expertise may be a factor inhibiting workplace development for subordinates, and makes a number of suggestions about how to prepare the line manager for effective employee development. Key issues are illustrated by reference to a case study example. The case demonstrates that a high profile management development programme within a major international organisation failed to meet all objectives because of the unwillingness of the line management team to participate in the development of subordinates back in the workplace.     

Fiscal expansion, monetary policy, interest rate risk premia, and wage reactions

We examine the macroeconomic implications of fiscal policy in a small open economy, with emphasis on the interactions between fiscal, monetary and labour market policies. The paper uses the NBNZ-DEMONZ macroeconometric model. Novel features of the model are that it includes an endogenous interest rate risk premium (IRRP), and forward-looking monetary and fiscal policy reaction functions which capture the essence of New Zealand's Reserve Bank and Fiscal Responsibility Acts. The most important empirical result is that the postulated IRRP, proxying financial market mechanisms, can contribute at least as much as the monetary policy reaction function to maintaining price stability. Also of significance are that an income tax cuts package shows more damped real GDP and underlying inflation paths than does an expenditure increases equivalent; and that the inflationary and real sector impacts of a personal income tax cut package depend heavily on how the cut is `shared' between firms and workers. The nature and interdependence of monetary and fiscal policies and labour market conditions are therefore crucial to the macroeconomic outcomes.     

The Use (And Abuse) of Psychometric Tests In British Industry and Commerce

Sue Newell, from the School of Sport and Exercise Sciences, University of Birmingham, and Viv Shackleton, from Aston University Business School, report on a survey of the use of psychometric tests in selection and in training and development. They argue that, while the majority of test users appear to have recognised the importance of training those who administer and interpret test results, the provision of discussion time, or even simple feedback of test results, is not universally practised. This is especially so in the case of tests used in selection.     

Consumption-smoothing in a small, cyclically volatile open economy: Evidence from New Zealand

New Zealand's current account of the balance of payments has been persistently in deficit since the early 1970s and increased markedly during the late 1990s. Should this cause significant concern, for such a small, cyclically volatile open economy? Our results show that VAR1 and VAR2 forms of the traditional intertemporal consumption-smoothing model reflect very satisfactorily the volatile directions and turning points observed, that the data are not consistent with consumption-tilting to the present, and that New Zealand has had considerable success to date in consumption-smoothing around its average 5% current account deficit. Perhaps more unexpectedly, a Bergin–Sheffrin-type model of a small open economy with variable interest rates and exchange rates has not performed noticeably better.     

The development of Manchester Airport, 1938–1978: central government subsidy and local authority management

This paper assesses the historical impact of central government policy on the planning and ownership of UK airports with particular reference to development at Ringway, Manchester. We argue that during a crucial period in the creation of airport infrastructure, central government policy proved equivocal. This meant that it was left to the municipal owners to undertake investment if the airport was to grow. The only significant state support was the provision of grant aid when government generally rejected the principle of subsidised airport operations. The local authority displayed considerable initiative, and the result was the nurturing of an international gateway.