Estimating New Zealand's Structural Budget Balance
AbstractExisting methodologies for estimating a government’s structural budget balance are reviewed and applied to the case of New Zealand. Besides the conventional cyclical adjustment, an assessment is made of other possible non-structural elements to the budgetary position, including the terms of trade, asset prices and unbalanced growth. A key result is that the terms-of-trade boom, which began in the late 2000s, is associated with around 1% of GDP in tax revenues that may not be structural. Uncertainty surrounding cyclically-adjusted balance estimates is presented using fan charts.
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Bibliographic InfoPaper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 10/08.
Date of creation: Nov 2010
Date of revision:
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Postal: New Zealand Treasury, PO Box 3724, Wellington, New Zealand
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fiscal policy; business cycle; terms of trade; asset prices;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
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Treasury Working Paper Series, New Zealand Treasury
13/02, New Zealand Treasury.
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- Bruce White, 2013. "Macroeconomic Policy in New Zealand: From the Great Inflation to the Global Financial Crisis," Treasury Working Paper Series, New Zealand Treasury 13/30, New Zealand Treasury.
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