8 Conclusion
8.1 Conclusion
In this paper we gave a brief overview of the general structure of NZTM as well as some of its equations. Additionally, we outlined additional changes to the model since the previous documentation of the model (Szeto, 2002). The majority of these changes reflect developments to make the model more amenable to forecasting, reflecting NZTM's increasing role as part of the New Zealand Treasury's forecasting process. Salient changes include splitting the inflation equations into tradables/non-tradables components, the use of a desired household debt term to allow households to temporarily consume faster than their income and wealth would imply (reflecting the recent experience in New Zealand) and the introduction of more disaggregation, particularly of import components and deflators.
Any model should evolve and we expect that this paper will need to be updated as the equations in NZTM are continually modified to reflect changes both in the sciences of economics and economic modelling and the structure of the New Zealand economy.
