In Vermittlung zwischenkirchlicher Gemeinschaft, NZM Supplementa 17 (Shoneck-Beckenried), pp.
Beckmann)," NZM Supplementa 10 (Schoneck-Beckenried, 1961), pp.
Since this implicitly involves dropping the common-technology assumption, the second objective of the paper is to use a time-series approach to explore the convergence properties of a `consensus policy model' in response to a productivity shock, and for this purpose we use the NZM model of the New Zealand Treasury, detailed in Econtech (1995).
For example the NZM model analysed below has a nested CES production structure, with an elasticity of substitution between primary factors of 0.
The vehicle is the NZM model of the New Zealand Treasury, details of which are provided in Econtech (1995).
NZM embodies perfect foresight in financial markets:- uncovered interest parity, the expectations theory of the term structure and a rationally expected inflation rate provide the determinants of real and nominal interest rates in the model.
Although it is not possible to decompose the growth rate track in NZM into an initial jump and subsequent elimination of the growth-rate gap as in Figure 2, it is clear that the tracks for the growth rates quickly become very similar.
In light of the results of the previous section - that the time series convergence speeds of NZM differ from the cross-section results underpinning the Barro equation - it is interesting to use NZM to also analyse the time-series implications for interest-rate differentials of relaxing the common-technology assumption.
These changes can be interpreted in the context of the investment equation in NZM, which is stylised as