Fiscal Policy

• The Doug Purvis Memorial Lecture—Monetary/Fiscal Policy Mix and Financial Stability: The Medium Term Is Still the Message

  Staff Discussion Paper 2016-13 Stephen S. Poloz

  In the Doug Purvis Memorial Lecture, Governor Stephen S. Poloz shows how changing the mix of monetary and fiscal policies can yield the same outcomes for growth and inflation, but lead to different results for public sector and private sector debt levels, which can impact financial stability.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Economic models, Financial stability, Fiscal Policy, Monetary policy framework JEL Code(s): E, E3, E37, E5, E6, E63

• Monetary Commitment and the Level of Public Debt

  Staff Working Paper 2016-3 Stefano Gnocchi, Luisa Lambertini

  We analyze the interaction between committed monetary policy and discretionary fiscal policy in a model with public debt, endogenous government expenditures, distortive taxation and nominal rigidities.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Credibility, Fiscal Policy, Inflation targets, Monetary policy framework JEL Code(s): E, E2, E24, E3, E32, E5, E52

• Risk Sharing in the Presence of a Public Good

  Staff Working Paper 2015-27 Josef Schroth

  This paper studies an economy where agents can spend resources on consuming a private good and on funding a public good. There is asymmetric information regarding agents’ relative preference for private versus public good consumption.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Financial stability, Financial system regulation and policies, Fiscal Policy JEL Code(s): D, D8, D82, D86, E, E6, E62, H, H2, H21, H23, H7, H77

• Global Inflation Dynamics in the Post-Crisis Period: What Explains the Twin Puzzle?

  Staff Working Paper 2014-36 Christian Friedrich

  Inflation dynamics in advanced countries have produced two consecutive puzzles during the years after the global financial crisis. The first puzzle emerged when inflation rates over the period 2009-11 were consistently higher than expected, although economic slack in advanced countries reached its highest level in recent history.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Fiscal Policy, Inflation and prices, International topics JEL Code(s): E, E3, E31, E5, F, F4, F41

• Housework and Fiscal Expansions

  Staff Working Paper 2014-34 Stefano Gnocchi, Daniela Hauser, Evi Pappa

  We build an otherwise-standard business cycle model with housework, calibrated consistently with data on time use, in order to discipline consumption-hours complementarity and relate its strength to the size of fiscal multipliers.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Business fluctuations and cycles, Fiscal Policy JEL Code(s): E, E2, E24, E3, E32, E5, E52, E6, E62

• Housing and Tax Policy

  Staff Working Paper 2013-33 Sami Alpanda, Sarah Zubairy

  In this paper, we investigate the effects of housing-related tax policy measures on macroeconomic aggregates using a dynamic general-equilibrium model.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Economic models, Fiscal Policy, Housing JEL Code(s): E, E6, E62, H, H2, H24, R, R3, R38

• Analyzing Fiscal Sustainability

  Staff Working Paper 2013-27 Huixin Bi, Eric M. Leeper

  The authors study the implications of fiscal policy behaviour for sovereign risk in a framework that determines a country’s fiscal limit, the point at which, for economic or political reasons, taxes and spending can no longer adjust to stabilize debt.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Economic models, Fiscal Policy JEL Code(s): E, E6, E62, E65, H, H6, H63

• 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, Uncertainty and monetary policy JEL Code(s): E, E6, E62, E63, H, H3, H30, H6, H60

• 21 February 2013 The G-20 Framework for Strong, Sustainable and Balanced Growth: Macroeconomic Coordination Since the Crisis

  Bank of Canada Review - Winter 2012-2013 Robert Lavigne, Subrata Sarker

  Since 2009, the G-20 Framework for Strong, Sustainable and Balanced Growth has provided a mechanism for international macroeconomic policy coordination. The Framework has had some successes, including agreement on objectives for fiscal consolidation. However, post-crisis global growth has been neither strong nor balanced. Progress has also been slow in developing credible fiscal consolidation plans in some advanced countries and in increasing exchange rate flexibility in certain emerging economies. A stronger peer review process and enhanced analysis of international spillovers would increase the Framework’s influence on member policies.

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Exchange rate regimes, Fiscal Policy, International topics, Recent economic and financial developments JEL Code(s): E, E6, E61, F, F5, F53, F55

• 17 May 2012 On the Adjustment of the Global Economy

  Bank of Canada Review - Spring 2012 Carlos De Resende, Claudia Godbout, René Lalonde, Eric Morin, Nikita Perevalov

  This article discusses three scenarios for the adjustment of the global economy. In a “baseline” scenario—which encompasses fiscal consolidation in major advanced economies, growth-friendly structural reforms in Europe and Japan, and greater exchange rate flexibility and reforms in the emerging-market economies of Asia to induce rotation of demand away from net exports—global current account imbalances […]

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Balance of payments and components, Exchange rates, Fiscal Policy, International topics, Recent economic and financial developments JEL Code(s): F, F3, F32, F37, F4, F42