The Contribution of Foreign Borrowing to the New Zealand Economy

Arbeitspapier

New Zealand's unrelenting current account deficits, its trade performance and high external debt level remain central to ongoing economic policy debates. However, what has been overlooked in the discussion of New Zealand's economic relations with its trading partners is the positive contribution that foreign capital inflow makes to the nation's economic development. International trade in saving between New Zealand and the rest of the world has potentially contributed more to its economic growth than international trade in goods and services. This paper views New Zealand's current account deficits as symptomatic of an economic growth process in which the rate of the economy's capital accumulation exceeds its domestic saving rate. Expansion of the domestic capital stock attributable to foreign saving leads to higher national output and national income per head, net of the servicing cost of foreign capital.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: New Zealand Treasury Working Paper ; No. 08/03

Classification and Topics

• Classification: Wirtschaft ; International Finance: General
• Subject: Foreign borrowing ; national income ; current account deficit ; national wealth ; New Zealand ; Internationale Staatsschulden ; Leistungsbilanz ; Außenwirtschaftliches Gleichgewicht ; Nationaleinkommen ; Vermögensrechnung ; Neuseeland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Makin, Anthony ; Zhang, Wei ; Scobie, Grant
• Event: Veröffentlichung
• (who): New Zealand Government, The Treasury
• (where): Wellington
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/205596
• Last update: 10.03.2025, 11:43 AM CET