The Potential Contribution of Fiscal Policy to Rebalancing and Growth in New Zealand
Electronic Access:
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Summary:
Simulations with the Fund’s GIMF model show that raising government savings in New Zealand permanently by 1 percent of GDP is likely to improve the current account balance by about ½ percent of GDP. The way government savings are achieved matters for GDP but little for the current account. However, results are sensitive to changes in the risk premium. Fiscally neutral changes in taxes and expenditures can raise output in the long run.
Series:
Working Paper No. 2010/128
Subject:
Consumption Expenditure Government consumption Income National accounts Return on investment
Frequency:
Monthly
English
Publication Date:
May 1, 2010
ISBN/ISSN:
9781455200870/1018-5941
Stock No:
WPIEA2010128
Pages:
24
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