Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205480 
Authors: 
Year of Publication: 
2002
Series/Report no.: 
New Zealand Treasury Working Paper No. 02/05
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
The fiscal gap calculates the change in fiscal policy settings needed to achieve a particular debt target at some point in the future. This working paper calculates fiscal gaps for New Zealand under a range of scenarios, including alternative spending growth, debt targets and interest rates. A positive (negative) fiscal gap indicates that a permanent increase (decrease) in the primary surplus is required to achieve a selected debt target in a particular terminal year. The scenarios suggest that under a range of alternative assumptions the fiscal gap out to 2051 is positive. These results are in accord with previous long-term fiscal projections, which, unlike the fiscal gap, have not been explicit about the nature of long-term fiscal imbalances. The analysis provides a platform for the further examination of potential long-term fiscal imbalances under a wider range of assumptions (e.g., around demographics, labour force participation, health spending) as well as alternative modelling techniques that allow for uncertainty.
Subjects: 
Long-term fiscal imbalance
intertemporal budget constraint
JEL: 
E62
H60
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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