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Sovereign Net Worth: An Analytical Framework

Author

Listed:
  • Simon Bradbury
  • Jim Brumby
  • David Skilling

Abstract

The Fiscal Responsibility Act requires the Crown to articulate targets for a series of fiscal variables, including net worth. Given the dramatic improvement in the fiscal position in recent years, a critical policy question relates to how (and which) measures of Crown net worth should be targeted. This paper sets out a framework for targeting Crown net worth. It does so by supplementing the GAAP-based measure with forward-looking information about spending and tax revenue. The paper argues that targeting net worth for the Crown requires the estimation of a path, rather than a static level.

Suggested Citation

  • Simon Bradbury & Jim Brumby & David Skilling, 1999. "Sovereign Net Worth: An Analytical Framework," Treasury Working Paper Series 99/03, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:99/03
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    File URL: https://treasury.govt.nz/sites/default/files/2007-10/twp99-03.pdf
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    References listed on IDEAS

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    Cited by:

    1. Timothy C. Irwin, 2015. "Defining The Government'S Debt And Deficit," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 711-732, September.
    2. Peter Mikek, 2004. "Inflation targeting and switch of fiscal regime in New Zealand," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 165-172.
    3. John Stephenson & Grant Scobie, 2002. "The Economics of Population Ageing," Treasury Working Paper Series 02/04, New Zealand Treasury.
    4. Milesi-Ferretti, Gian Maria & Moriyama, Kenji, 2006. "Fiscal adjustment in EU countries: A balance sheet approach," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3281-3298, December.
    5. Nick Davis, 2001. "Does Crown Financial Portfolio Composition Matter?," Treasury Working Paper Series 01/34, New Zealand Treasury.
    6. Timothy Irwin & Oscar Parkyn, 2009. "Improving the Management of the Crown’s Exposure to Risk," Treasury Working Paper Series 09/06, New Zealand Treasury.
    7. Chew Ng & Bob Shead, 1999. "Measuring Governments’ Net Worth," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 6(4), pages 339-350.

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