Economics, Econometrics and Finance
4 years ago

Fiscal policy outweighs monetary policy in influencing New Zealand's economy.

RePEc: Research Papers in Economics
THE IDENTIFICATION OF FISCAL AND MONETARY POLICY IN A STRUCTURAL VAR
Mardi Dungey, Renée Fry-McKibbin

Paper Summary

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The article identifies the effects of fiscal and monetary policies in an open economy using a combination of methods like sign restrictions, cointegration, and exclusion restrictions. The study focuses on New Zealand and shows that fiscal policy has had a significant impact on output over the past 20 years, often more than monetary policy.