The New Zealand Treasury and the Reserve Bank of New Zealand both maintain and use comprehensive macroeconomic models of the New Zealand economy: NZM and FPS respectively. In this paper, shocks are applied to the two models to illustrate and compare their dynamic properties. The most notable...

This paper outlines how the Reserve Bank of New Zealand's Forecasting and Policy System (FPS) is used to prepare the quarterly economic projections. In addition to a very brief overview of the system, the paper focuses on four key issues. First, the current methodology for incorporating a...

In this paper, stochastic simulations of the Reserve Bank of New Zealand's new macroeconomic model, FPS, are used to examine the issue of which price index monetary policy should stabilise in a small open economy. Under the class of policy rules considered, targeting a measure of domestic...