Advanced Search
MyIDEAS: Login to save this paper or follow this series

Indicators of Fiscal Impulse for New Zealand

Contents:

Author Info

  • Renee Philip
  • John Janssen

    ()
    (The Treasury)

Registered author(s):

    Abstract

    This paper defines fiscal impulse as a measure of whether government fiscal policy decisions are adding to, or subtracting from, aggregate demand pressures in the economy. When assessing the effects of fiscal policy on the economy it can be useful to have an approximate estimate of fiscal impulse. Estimates of fiscal impulse range from simple indicators based on fiscal aggregates, to more complicated approaches requiring greater use of judgement and economic theory. This paper develops reasonably simple indicators based on adjusted fiscal aggregates. It also sets out some sensitivity analysis. The indicators reflect intuitive assessments about changes in New Zealand fiscal policy over the last decade and looking forward into the forecast period. Although estimates are relatively insensitive to alternative assumptions, this is likely to be the result of the relative stability of the time period under consideration. Simple indicators of fiscal impulse have limitations. At best they can only provide an indication of the first round impact of changes in discretionary fiscal policy. A more complete assessment of the effects of fiscal policy on the economy requires a full-scale macroeconomic model, perhaps complemented with time series analysis.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.treasury.govt.nz/publications/research-policy/wp/2002/02-30/twp02-30.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 02/30.

    as in new window
    Length: 35 pages
    Date of creation: Dec 2002
    Date of revision:
    Handle: RePEc:nzt:nztwps:02/30

    Contact details of provider:
    Postal: New Zealand Treasury, PO Box 3724, Wellington, New Zealand
    Phone: +64-4-472 2733
    Fax: +64-4-473 0982
    Web page: http://www.treasury.govt.nz
    More information through EDIRC

    Related research

    Keywords: Fiscal impulse; cyclical-adjustment; aggregate demand; New Zealand.;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Barrett, Alan & Barry, Frank & Van der Horst, Albert & Kearney, Ide & Lane, Philip R. & Nolan, Brian & O'Brien, Martin & Walsh, John R., 2007. "Budget Perspectives 2008," Research Series, Economic and Social Research Institute (ESRI), Economic and Social Research Institute (ESRI), number BMI199 edited by Callan, Tim.
    2. Roberto Perotti, 1999. "Fiscal Policy In Good Times And Bad," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(4), pages 1399-1436, November.
    3. Kam Leong Szeto, 2002. "A dynamic computable general equilibrium (CGE) model of the New Zealand economy," Treasury Working Paper Series, New Zealand Treasury 02/07, New Zealand Treasury.
    4. Olivier Blanchard & Roberto Perotti, 1999. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," NBER Working Papers 7269, National Bureau of Economic Research, Inc.
    5. Alberto Alesina & Roberto Perotti, 1996. "Fiscal Adjustments in OECD Countries," IMF Working Papers, International Monetary Fund 96/70, International Monetary Fund.
    6. Martin Scheider, 2002. "Local fiscal equalisation based on fiscal capacity: the case of Austria," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 23(1), pages 105-133, March.
    7. John Janssen, 2001. "New Zealand's Fiscal Policy Framework: Experience and Evolution," Treasury Working Paper Series, New Zealand Treasury 01/25, New Zealand Treasury.
    8. Alberto Alesina & Roberto Perotti, 1996. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," NBER Working Papers 5730, National Bureau of Economic Research, Inc.
    9. Nigel Andrew Chalk, 2002. "Structural Balances and All That," IMF Working Papers, International Monetary Fund 02/101, International Monetary Fund.
    10. Alan J. Auerbach & Daniel R. Feenberg, 2000. "The Significance of Federal Taxes as Automatic Stabilizers," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(3), pages 37-56, Summer.
    11. repec:esr:chaptr:jacb200010 is not listed on IDEAS
    12. repec:fth:coluec:754 is not listed on IDEAS
    13. Axel Schimmelpfennig & Selma Mahfouz & Richard Hemming, 2002. "Fiscal Policy and Economic Activity During Recessions in Advanced Economies," IMF Working Papers, International Monetary Fund 02/87, International Monetary Fund.
    14. Kam Leong Szeto, 2001. "An Econometric Analysis of a Production Function for New Zealand," Treasury Working Paper Series, New Zealand Treasury 01/31, New Zealand Treasury.
    15. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers, OECD Publishing 79, OECD Publishing.
    16. Julie Tam & Heather Kirkham, 2000. "Automatic Fiscal Stabilisers: Implications for New Zealand," Treasury Working Paper Series, New Zealand Treasury 01/10, New Zealand Treasury, revised 2001.
    17. Professor Lars E O Svensson, 2001. "Independent review of the operation of monetary policy in New Zealand," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, Reserve Bank of New Zealand, vol. 64, March.
    18. Ashok Bhundia & Gus O'Donnell, 2002. "UK policy coordination: the importance of institutional design," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 23(1), pages 135-164, March.
    19. Hall, Viv B. & Rae, David, 1998. "Fiscal expansion, monetary policy, interest rate risk premia, and wage reactions," Economic Modelling, Elsevier, Elsevier, vol. 15(4), pages 621-640, October.
    20. Alberto Alesina & Roberto Perotti, 1997. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," IMF Staff Papers, Palgrave Macmillan, Palgrave Macmillan, vol. 44(2), pages 210-248, June.
    21. Kearney, Ide & McCoy, Daniel & Duffy, David & McMahon, Michael & Smyth, Diarmaid, 2000. "Assessing the Stance of Irish Fiscal Policy," Papers, Economic and Social Research Institute (ESRI) BP2001/1, Economic and Social Research Institute (ESRI).
    22. Claude Giorno & Pete Richardson & Deborah Roseveare & Paul van den Noord, 1995. "Estimating Potential Output, Output Gaps and Structural Budget Balances," OECD Economics Department Working Papers, OECD Publishing 152, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Lozano Luis Ignacio & Carolina Aristizábal, 2003. "Déficit público y desempeño económico en la década del noventa. El caso colombiano," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE.
    2. Iris Claus & Aaron Gill & Boram Lee & Nathan McLellan, 2006. "An empirical investigation of fiscal policy in New Zealand," Treasury Working Paper Series, New Zealand Treasury 06/08, New Zealand Treasury.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nzt:nztwps:02/30. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Web and Publishing Team, The Treasury).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.