A dynamic computable general equilibrium (CGE) model of the New Zealand economy
Kam Leong Szeto (kam.szeto@treasury.govt.nz)
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Kam Leong Szeto: The Treasury, https://treasury.govt.nz/
No 02/07, Treasury Working Paper Series from New Zealand Treasury
Abstract:
This paper documents the structure and key properties of a computable general equilibrium (CGE) model of the New Zealand economy. It is a three-good, small open economy model, which features a well-developed production block. This production block has been estimated as a system using Full Information Maximum Likelihood. Another key feature of the model is that it has a two–tiered structure: the steady-state version of the model and the dynamic version of the model. Using the steady-state version of the model, a macroeconomic balance measure of New Zealand’s equilibrium exchange rate can be derived. Furthermore, the steady–state model provides estimates of potential output, which is used to measure the level of excess demand in the economy. The dynamic model is used to trace the dynamic response of a range of macroeconomic variables to various shocks such as changes to world prices for exports and changes to government policy.
Keywords: Computable general equilibrium model; Equilibrium exchange rate; potential output; Macroeconomic dynamics (search for similar items in EconPapers)
JEL-codes: C51 E23 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2002-06
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Citations: View citations in EconPapers (11)
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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nztwps:02/07
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