E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
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Optimization in a Simulation Setting: Use of Function Approximation in Debt Strategy Analysis
The stochastic simulation model suggested by Bolder (2003) for the analysis of the federal government's debt-management strategy provides a wide variety of useful information. It does not, however, assist in determining an optimal debt-management strategy for the government in its current form. -
Time-Consistent Control in Non-Linear Models
We show how to use optimal control theory to derive optimal time-consistent Markov-perfect government policies in nonlinear dynamic general equilibrium models, extending the result of Cohen and Michel (1988) for models with quadratic objective functions and linear dynamics. We replace private agents' costates by flexible functions of current states in the government's maximization problem. -
The Institutional and Political Determinants of Fiscal Adjustment
The author empirically assesses the effects of institutional and political factors on the need and willingness of governments to make large fiscal adjustments. -
The 1975–78 Anti-Inflation Program in Retrospect
The author provides an overview of the 1975–78 Anti-Inflation Program (AIP), in a background document prepared for a seminar organized by the Bank of Canada to mark the AIP's 30th anniversary. -
The Transmission of World Shocks to Emerging-Market Countries: An Empirical Analysis
The first step in designing effective policies to stabilize an economy is to understand business cycles. No country is isolated from the world economy and external shocks are becoming increasingly important. -
Characterization of the Dynamic Effects of Fiscal Shocks in a Small Open Economy
The author studies the macroeconomic consequences of discretionary changes in the fiscal policy instruments for Canada. -
A Forecasting Model for Inventory Investments in Canada
The authors present an empirical model to forecast short-run inventory investment behaviour for Canada. -
The Implications of Transmission and Information Lags for the Stabilization Bias and Optimal Delegation
In two recent papers, Jensen (2002) and Walsh (2003), using a hybrid New Keynesian model, demonstrate that a regime that targets either nominal income growth or the change in the output gap can effectively replicate the outcome under commitment and hence reduce the size of the stabilization bias. -
Monetary and Fiscal Policies in Canada: Some Interesting Principles for EMU?
Choosing a well-designed framework for fiscal and monetary policies is a challenge for economic authorities.