Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268085 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
New Zealand Treasury Working Paper No. 21/02
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
This paper estimates the macroeconomic effects of government spending shocks in New Zealand. Using a structural vector autoregression (SVAR) model, I find small output multipliers for government consumption but large multipliers for government investment. Importantly, the real exchange rate appreciates after positive government spending shocks, consistent with classic theory. Private consumption and private investment decrease after government consumption shocks, but increase after government investment shocks. I show that selecting the appropriate series for government investment is important to estimating its effects.
Subjects: 
government consumption
government investment
New Zealand
multiplier
VAR
JEL: 
C32
E32
E62
H30
H54
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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