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Author/Editor:
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Schule, Werner
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Publication Date:
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May 01, 2010
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Electronic Access:
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Free Full text
(PDF file size is 1,936KB).
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
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Summary:
Simulations with the Fund’s GIMF model show that raising government savings in New Zealand permanently by 1 percent of GDP is likely to improve the current account balance by about ½ percent of GDP. The way government savings are achieved matters for GDP but little for the current account. However, results are sensitive to changes in the risk premium. Fiscally neutral changes in taxes and expenditures can raise output in the long run.
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Order a print copy
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Series:
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Working Paper No. 10/128
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Subject(s):
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Current account balances | Current account deficits | Economic models | Fiscal policy | Government expenditures | New Zealand | Public sector savings | Tax reforms
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Author's Keyword(s):
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Public savings | current account | tax and expenditure reform |
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