An Introduction to the New Zealand Treasury Model

Michael Ryan and Kam Leong Szeto ()
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Kam Leong Szeto: The Treasury, https://treasury.govt.nz

No 09/02, Treasury Working Paper Series from New Zealand Treasury

Abstract: The Treasury is the New Zealand government’s lead advisor on economic and financial issues. Part of this advice consists of providing the government with forecasts of economic and fiscal variables. Economic forecasts are important, not only as a basis for forecasts of tax revenue, but also in informing the government of the macroeconomic environment in which proposed fiscal policy settings will operate. The New Zealand Treasury Model (NZTM) is an important part of the economic forecasting process at the Treasury. This paper has three purposes. The first is to give readers an idea of the key features of NZTM. The second is to detail major changes to the model since the last published documentation of the model (Szeto, 2002). These model developments have enhanced NZTM to provide more detailed forecasts. Key changes include the disaggregation of deflators into the various expenditure GDP components, the introduction of consumption and capital goods imports into the model (rather than just treating them as intermediate imports) and the disaggregation of the inflation equation into tradable and non-tradable components. The final purpose of this paper is to outline briefly NZTM’s role in the Treasury’s forecasting process.

Keywords: Computable general equilibrium model; New Zealand economy; forecasting (search for similar items in EconPapers)
JEL-codes: C68 E17 E2 (search for similar items in EconPapers)
Pages: 71
Date: 2009-10
New Economics Papers: this item is included in nep-for
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Citations: View citations in EconPapers (2)

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