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An Application of Portfolio Theory to New Zealand's Public Sector - WP 98/04

Publication Details

  • An Application of Portfolio Theory to New Zealand's Public Sector
  • Published: Dec 1998
  • Status: Current
  • Author: Huther, Jeff
    • Hard copy: Available in PDF format only.
     

    An Application of Portfolio Theory to New Zealand's Public Sector

    New Zealand Treasury Working Paper 98/04

    Published Dec 1998

    Author: Jeff Huther 

    Abstract

    In this paper, modern portfolio measures of performance are applied to the New Zealand central government's assets and liabilities. The results of this analysis show the position of the government's portfolio relative to its individual holdings. Using this analysis, alternative uses of budget surpluses are considered: reducing domestic debt, reducing foreign debt, increasing lending to students, and investing in equities. Greater investment in equities, by the government, stands out as improving the performance of the portfolio (ie lower volatility and greater returns).

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