An empirical investigation of fiscal policy in New Zealand

Iris Claus, Aaron Gill, Boram Lee and Nathan McLellan ()

No 06/08, Treasury Working Paper Series from New Zealand Treasury

Abstract: This paper examines the effects of fiscal policy, measured by changes in government spending and net tax (government tax revenue less transfer payments), on New Zealand GDP. The framework of analysis is a structural vector autoregression (VAR) model of the New Zealand economy, employing and extending estimation techniques used by Blanchard and Perotti (2002). This model is then used to examine the dynamic effects of changes in government spending, taxes and transfers on GDP and the contributions of discretionary fiscal policy to New Zealand business cycles.

Keywords: Fiscal policy; business cycle fluctuations; vector autoregression (search for similar items in EconPapers)
JEL-codes: C32 E32 E62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-sea
Date: 2006-07
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Persistent link: http://EconPapers.repec.org/RePEc:nzt:nztwps:06/08

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