publication . Research . Article . Preprint . 2001

A Structural VAR Approach to Estimating Budget Balance Targets

Robert A Buckle; Kunhong Kim; Julie Tam;
Open Access English
  • Published: 01 Jan 2001
  • Publisher: Wellington: New Zealand Government, The Treasury
Abstract
The Fiscal Responsibility Act 1994 states that, as a principle of responsible fiscal management, a New Zealand government should ensure total Crown debt is at a prudent level by ensuring total operating expenses do not exceed total operating revenues. In this paper a structural VAR model is estimated to evaluate the impact on the government's cash operating surplus (or budget balance) of four independent disturbances: supply, fiscal, real private demand, and nominal disturbances. Based on the distribution of these disturbances, stochastic simulations are undertaken to derive the level of the ex ante cash budget balance needed to achieve an actual cash budget bal...
Subjects
free text keywords: C51, E62, H61, Budget target, Fiscal policy, Fiscal Responsibility Act, Structural VAR, Stochastic Simulation, Budget target; Fiscal policy; Fiscal Responsibility Act; Structural VAR; Stochastic Simulation, ddc:330, General Economics, Econometrics and Finance, Operating surplus, Economics, Vector autoregression, Time horizon, Revenue, Public economics, Operating expense, Cash, media_common.quotation_subject, media_common, Crown debt, Monetary economics, jel:C51, jel:E62, jel:H61
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publication . Research . Article . Preprint . 2001

A Structural VAR Approach to Estimating Budget Balance Targets

Robert A Buckle; Kunhong Kim; Julie Tam;