Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205451 
Year of Publication: 
2000
Series/Report no.: 
New Zealand Treasury Working Paper No. 01/10
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
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.
Subjects: 
automatic fiscal stabilisers
economic cycle
cyclical budget balance
expenditure and tax elasticities
JEL: 
E62
H61
Creative Commons License: 
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Document Type: 
Working Paper

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