Uncertain Fiscal Consolidations Staff Working Paper 2013-26 Huixin Bi, Eric M. Leeper, Campbell Leith The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition - either tax- or spending-based - are uncertain. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Monetary policy and uncertainty JEL Code(s): E, E6, E62, E63, H, H3, H30, H6, H60
Sovereign Default Risk Premia, Fiscal Limits and Fiscal Policy Staff Working Paper 2011-10 Huixin Bi We develop a closed economy model to study the interactions among sovereign risk premia, fiscal limits, and fiscal policy. The stochastic fiscal limits, which measure the ability and willingness of the government to service its debt, arise endogenously from a dynamic Laffer curve. Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, International topics JEL Code(s): E, E6, E62, H, H3, H30, H6, H60
L'endettement du Canada et ses effets sur les taux d'intérêt réels de long terme Staff Working Paper 1996-14 Jean-François Fillion This paper examines the effects that Canada's indebtedness has on Canadian real long-term interest rates, using the vector error-correction model (VECM). Our results show that there is a strongly cointegrated relationship between real interest rates in Canada, U.S. real interest rates, and Canadian public and external debt ratios. Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Interest rates JEL Code(s): E, E4, E43, F, F3, F30, H, H6, H60
Fiscal Policy and External Balance in the G-7 Countries Technical Report No. 60 Stephen S. Poloz This paper assesses evidence, from the G-7 countries, of a link between a country's fiscal policy and its external balance, often referred to as the "twin deficits" phenomenon. It begins by reviewing the stylized facts, and then examines the theoretical case for such a link. Content Type(s): Staff research, Technical reports Topic(s): Balance of payments and components, Fiscal policy, International topics JEL Code(s): F, F3, F32, F4, F41, H, H6, H60
Government Debt in an Open Economy Technical Report No. 58 Douglas Laxton, Robert Tetlow This paper introduces the CORE model, a prototype for a new quarterly model of the Canadian economy, designed for projections and policy analysis with focus beyond the very short run. The model has a clearly defined equilibrium and explicit adjustment mechanisms, primarily through relative prices, that are dynamically stable. Overlaid on a neo-classical growth model […] Content Type(s): Staff research, Technical reports Topic(s): Fiscal policy JEL Code(s): C, C5, C53, F, F3, F32, H, H3, H30, H6, H60
Les effets macroéconomiques des déficits budgétaires : résultats d'un modèle de simulation Technical Report No. 47 Pierre Duguay, Yves Rabeau An increase in a government deficit can have two effects: short-term stimulation of aggregate demand and employment, and long-term contraction of potential output. In this paper, these effects are illustrated using a dynamic, macroeconomic simulation model. The model is not a forecasting tool; it is intended to bridge the gap between Keynesian and supply-side economics […] Content Type(s): Staff research, Technical reports Topic(s): Economic models, Fiscal policy JEL Code(s): H, H6, H60
La non-neutralité du mode de financement du gouvernement Technical Report No. 36 Paul Masson It has long been a subject of debate among economists as to whether different methods of financing government expenditures—issuing bonds or raising taxes—will bring about different effects on the economy. The purpose of this technical report is to quantify the substitution effects brought about by tax rate changes and to see to what extent they […] Content Type(s): Staff research, Technical reports Topic(s): Debt management JEL Code(s): H, H6, H60
Modelling Government Fiscal Behaviour in Canada Technical Report No. 34 Jack Selody, Kevin Lynch There are many models of fiscal policy in the economic literature and each has been based on a particular set of assumptions concerning the interaction of policy variables. However, even though these assumptions are critical to the behaviour of the models, there has as yet been no systematic attempt to test their validity or relative […] Content Type(s): Staff research, Technical reports Topic(s): Fiscal policy JEL Code(s): C, C5, C50, H, H3, H30, H6, H60