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Cross-Country Experience in Reducing Net Foreign Liabilities :, Lessons for New Zealand, Ding Ding, Werner Schule, Yan Sun

This paper studies the dynamics of net foreign liabilities across a number of countries. Our historical analysis suggests that an orderly reduction in a country’s net foreign liabilities has mostly occurred when there was significant improvement in gross public savings through deliberate fiscal consolidation measures. Simulations of a dynamic general equilibrium model calibrated for New Zealand indicates that sustained government deficit reduction could improve the country’s net foreign assets by about half of the accumulated public savings. However, given New Zealand’s relatively strong fiscal positions and previous work noting structurally low household savings, an orderly improvement in New Zealand’s external position in the medium term will depend on a structural improvement in private savings
Table Of Contents
Cover; Cross-Country Experience in Reducing Net Foreign Liabilities: Lessons for New Zealand; I. INTRODUCTION; II. SELECTION OF EPISODES; Table; Table 1. Episodes of Reduction in Net Foreign Liabilities 1/; III. DYNAMICS OF NET FOREIGN LIABILITIES; Dynamics of Gross External Assets and Liabilities; Table 2. Dynamics of Gross Foreign Assets and Liabilities; An Accounting Framework of Decomposition; Table 3. Decomposition of Decreases in Net Foreign Liabilities; Orderly Reduction: Fiscal Consolidation vs. Private Deleveraging; Table 4. Public and Private Savings
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (21 p.)
Specific Material Designation
Form Of Item

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