Robert Tetlow

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Staff Working Papers

Government Debt and Deficits In Canada: A Macro Simulation Analysis

Staff Working Paper 1995-4 Tiff Macklem, David Rose, Robert Tetlow
This paper examines the macroeconomic implications of rising government debt in Canada and the short-run costs and long-run benefits of stemming the rise. The discussion begins with an evaluation of the long-run consequences of increasing government indebtedness, first based on the simple arithmetic of the government's long-run budget constraint, and then based on simulations of […]
Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy

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Technical Reports

The Bank of Canada's New Quarterly Projection Model, Part 3. The Dynamic Model: QPM

The Bank of Canada's new Quarterly Projection Model, QPM, combines the short-term dynamic properties necessary to support regular economic projections with the consistent behavioural structure necessary for policy analysis.
Content Type(s): Staff research, Technical reports Topic(s): Economic models JEL Code(s): C, C5, C53, E, E1, E17

The Bank of Canada's New Quarterly Projection Model, Part 1. The Steady-State Model: SSQPM

This report is the first documenting the Bank of Canada's new model of the Canadian economy, the Quarterly Projection Model (QPM). QPM is used at the Bank of Canada for both economic projections and policy analysis. Here the authors focus on the model's long-run properties, describing SSQPM, a model of the steady state of QPM […]
Content Type(s): Staff research, Technical reports Topic(s): Economic models JEL Code(s): C, C5, C51, E, E1, E13

Monetary Policy, Uncertainty and the Presumption of Linearity

Technical Report No. 63 Douglas Laxton, David Rose, Robert Tetlow
This report shows that extreme conditions and volatility in markets are much more likely to result from systematic policy errors in gauging and responding to inflationary pressures in an economy than from unfortunate random shocks. We describe a simple model that incorporates the key features of the policy control process. We use two versions of […]

A Simple Multivariate Filter for the Measurement of Potential Output

Technical Report No. 59 Douglas Laxton, Robert Tetlow
This paper examines techniques that have been used to estimate potential output and finds them wanting. We suggest a simple multivariate-filtering technique that is a generalization of the Hodrick-Prescott univariate filter. In univariate filters, only information about a variable itself is used in eliminating noise in order to obtain an estimate of the underlying trend. […]
Content Type(s): Staff research, Technical reports Topic(s): Potential output JEL Code(s): C, C1, C15, E, E2

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

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Bank Publications

Bank of Canada Review articles

November 9, 1994

The Bank of Canada's new Quarterly Projection Model (QPM): An introduction

This article provides an overview of the Bank of Canada's new economic model, the Quarterly Projection Model (QPM), which has been under development at the Bank since 1989. The model has two roles. It is used to make economic projections, which are conducted quarterly and form an important basis for discussions of monetary policy between staff and senior management. QPM is also a research tool: it was developed to analyse important changes to the economy or macroeconomic policies which require a deeper understanding of long-term economic forces. The model pays particular attention to factors shaping long-term equilibrium, such as stocks of wealth, capital, government debt and net foreign assets. Various sources of dynamics, including the adjustment of forward-looking expectations, operate to determine the transition path to equilibrium and the consistency of expectations. The article discusses the history of QPM and earlier economic models at the Bank, and provides a simple overview of how the model works.

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