Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205482 
Year of Publication: 
2002
Series/Report no.: 
New Zealand Treasury Working Paper No. 02/07
Publisher: 
New Zealand Government, The Treasury, Wellington
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.
Subjects: 
Computable general equilibrium model
Equilibrium exchange rate
potential output
Macroeconomic dynamics
JEL: 
C51
E23
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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