RBNZ released its unemployment report to understand if unemployment in one region of the country could influence unemployment in different regions. Upon completion, RBNZ found that unemployment in one region does affect unemployment in other regions although the impact varies. It was found that unemployment in Auckland and Waikato has the biggest impact on other regions while unemployment in Taranaki and Southland have the least impact.
“The paper finds rising unemployment in Auckland and Waikato has the biggest impact on unemployment around New Zealand. In contrast, rising unemployment in the Upper South Island, Southland, and Taranaki generate few spillovers into other regions.”
RBNZ has determined that the information in this report can assist in setting and amending future monetary policies to support employment in New Zealand. Similarly, the identification of regions with greater impacts will help in the improvement of unemployment forecasts.
“The modelling indicates that regions with the largest spillovers can be used to improve the accuracy of national unemployment forecasts.
This can help inform the Reserve Bank when it sets monetary policy to achieve its mandate in supporting employment in New Zealand.” Click here to read more
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