, lewis, and norman ( 2006 ) ; smith 22 we follow the methodology in smith ( 2006 ) where housing equity withdrawal is defined as the change in mortgage lending plus capital grants minus housing investment. housing investment includes residential investment in dwellings, household transfer costs, transfers of dwellings to the household sector, and net transfers of land to the household sector. capital grants include kiwisaver first home withdrawals and home start grants since their introduction in 2011. estimated residential investment and residential insurance pay - outs relating to the canterbury rebuild have been excluded, as the related fluctuations in equity may not represent changes in household behaviour. 23 wong ( forthcoming ) 24 for details of the cointegration estimation framework, see de veirman & dunstan ( 2008 ). the full - period analysis suggests that a 1 percent increase in real per - capita housing wealth is associated with a 0. 20 percent increase in real per - capita consumption on average, while the long - run income elasticity is 0. 47 percent. the marginal propensity to consume out of housing wealth is almost twice that of financial wealth ( 0. 12 percent ), although this difference in magnitude was much lower than that found in de veirman & dunstan ( 2008 ). 25 the increase in the coefficient on financial wealth is difficult to interpret as it was not well defined ( statistically significant ) in the pre - 2005 sample. in other results, excluding farm income that is highly variable, the parameter on financial wealth is more stable and statistically significant across the split samples. 26 given potential instability in the long - run relationship, which may undermine the cointegration approach, the wealth effects are also estimated using an alternative approach developed by carroll, otsuka, and slacalek ( 2011 ). the result is similar to the baseline in that the marginal propensity to consume out of housing wealth has fallen in the split sample post - 2005, while it increased for financial wealth. 27 the imf ( 2016 ) estimated an output gap of - 0. 8 percent ( as a percentage of potential gdp ) for advanced economies in 2016, improving from a trough of - 3. 8 percent in 2009. 28 modelling work in the rbnz has found the response of the output gap to an interest rate shock since the gfc is not statistically different from the pre - gfc period. 29 similar results for australia were reported by kent ( 2015 ). references buttiglione, l., lane, p., reich

muhammad bin ibrahim : beyond borders – bridging new horizons in asia pacific speech by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the 5th malaysia insurance summit “ beyond borders : bridging new horizons in asia pacific ”, kuala lumpur, 7 october 2015. * * * i am delighted to join you today at the 2015 malaysia insurance summit themed “ beyond borders : bridging new horizons in asia pacific ”. i understand that this is the fifth year the malaysian insurance institute has organised this event which brings together insurance and takaful professionals from around the region and beyond to discuss key developments in the industry. prospects of the asia pacific region the world is undergoing rapid structural changes amidst a rapidly evolving asia pacific as an important centre of growth. the international monetary fund has projected a growth of 5. 6 per cent for the asia and pacific region in 2015 and 5. 5 per cent in 2016, with the region expected to remain the global growth leader over the medium term. growth is primarily driven by domestic demand of asia ’ s 4. 3 billion inhabitants who account for 60 per cent of the world ’ s population. the region is also expected to be the strong driver of world insurance growth, with its share of the global insurance market likely to rise to 40 per cent in the next five years. in the medium term, the region is expected to benefit from the deeper regional financial integration agreed by the leaders of asean and recently reported concluding of tpp negotiation. these agreements would result in a more efficient allocation of regional savings to meet the region ’ s large investment needs which will support growth and consequently financial well - being and soundness. the improved income arising from the economic developments will spur greater demand for insurance services in the region and present immense growth opportunities for the insurance and takaful industry. the asia pacific region offers high growth prospects over the long term underpinned by potential demand arising from structural changes and evolving risk exposure. this will have the implication of increasing wealth and shifting preferences, but challenged by a rapidly ageing population and frequent incidences of catastrophic events. first, increasing wealth and shifting preferences in asia pacific rising incomes have increased the spending power and affluence of consumers in asia pacific. gdp per capita for the region reached 15, 242 us dollars as at end - 2013, well above the world average of 10, 613 us dollars for the same period. reflecting higher standards of living and enhanced purchasing power, demand for