Automatic Fiscal Stabilisers: Implications for New Zealand
Automatic fiscal stabilisers, or the cyclical components of the budget balance, are larger in New Zealand than in the average OECD country, reflecting both higher sensitivity to the conomic cycle, and a more volatile cycle. Fiscal vigilance is especially important in New Zealand. Large projected operating surpluses could easily disappear if lower economic outcomes are mistakenly assumed to be cyclical. But, automatic stabilisers are difficult to use in a policy framework as empirical estimates of the cyclical budget balance vary significantly. While the estimated trend in automatic stabilisers is broadly similar, the level varies significantly, such that at any point in time a 'structural surplus' may be dependant on the estimation method.
|Date of creation:||2000|
|Date of revision:||2001|
|Note:||An earlier draft of this paper was prepared by Julie Tam in 2000, and has been updated by Heather Kirkham.|
|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
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.:
- Karras, Georgios & Song, Frank, 1996. "Sources of business-cycle volatility: An exploratory study on a sample of OECD countries," Journal of Macroeconomics, Elsevier, vol. 18(4), pages 621-637.
- Pesaran, B. & Robinson, G. N., 1997. "Optimal funding rules," Journal of Economic Dynamics and Control, Elsevier, vol. 21(2-3), pages 329-345.
- Christina D. Romer, 1999.
"Changes in Business Cycles: Evidence and Explanations,"
NBER Working Papers
6948, National Bureau of Economic Research, Inc.
- Christina D. Romer, 1999. "Changes in Business Cycles: Evidence and Explanations," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 23-44, Spring.
- Darrel Cohen & Glenn Follette, 1999.
"The automatic fiscal stabilizers: quietly doing their thing,"
Finance and Economics Discussion Series
1999-64, Board of Governors of the Federal Reserve System (U.S.).
- Darrel Cohen & Glenn Follette, 2000. "The automatic fiscal stabilizers: quietly doing their thing," Economic Policy Review, Federal Reserve Bank of New York, issue Apr, pages 35-67.
- Goff, Brian, 1998. "Persistence in Government Spending Fluctuations: New Evidence on the Displacement Effect," Public Choice, Springer, vol. 97(1-2), pages 141-157, October.
- Guay, A & St-Amant, P, 1996.
"Do Mechanical Filters Provide a Good Approximation of Business Cycles?,"
78, Bank of Canada.
- Guay, A & St-Amant, P, 1996. "Do Mechanical Filters Provide a Good Approximation of Business Cycles?," Working Papers-Department of Finance Canada 1996-2, Department of Finance Canada.
- Koehler, Anne & Diebold, Francis X. & Giogianni, Lorenzo & Inoue, Atsushi, 1996. "Software review," International Journal of Forecasting, Elsevier, vol. 12(2), pages 309-315, June.
- Jean-Claude Chouraqui & Robert P. Hagemann & Nicola Sartor, 1990. "Indicators of Fiscal Policy: A Re-Examination," OECD Economics Department Working Papers 78, OECD Publishing.
When requesting a correction, please mention this item's handle: RePEc:nzt:nztwps:01/10. 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 references are entirely missing, you can add them using this form.