Fiscal Policy

• Time-Consistent Management of a Liquidity Trap with Government Debt

  Staff Working Paper 2018-38 Dmitry Matveev

  This paper studies optimal discretionary monetary and fiscal policy when the lower bound on nominal interest rates is occasionally binding in a model with nominal rigidities and long-term government debt. At the lower bound it is optimal for the government to temporarily reduce debt.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Fiscal Policy, Monetary Policy JEL Code(s): E, E5, E52, E6, E62, E63

• Sources of Borrowing and Fiscal Multipliers

  Staff Working Paper 2018-32 Romanos Priftis, Srecko Zimic

  This paper finds that debt-financed government spending multipliers vary considerably depending on the location of the debt buyer. In a sample of 33 countries, we find that government spending multipliers are larger when government purchases are financed by issuing debt to foreign investors (non-residents), compared with when government purchases are financed by issuing debt to home investors (residents).

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Debt Management, Economic models, Fiscal Policy, International financial markets JEL Code(s): E, E2, E6, E62, F, F4, F41, H, H3

• February 15, 2018 Anchoring Expectations: Canada’s Approach to Price Stability

  Remarks Lawrence Schembri Manitoba Association for Business Economists Winnipeg, Manitoba

  Deputy Governor Lawrence Schembri examines the success of the Bank’s monetary policy framework and explains the review being undertaken before its renewal in 2021.

  Content Type(s): Press, Speeches Topic(s): Central bank research, Credibility, Fiscal Policy, Inflation and prices, Inflation targets, Monetary policy framework

• Government Spending Multipliers Under the Zero Lower Bound: Evidence from Japan

  Staff Working Paper 2017-40 Thuy Lan Nguyen, Dmitriy Sergeyev, Wataru Miyamoto

  Using a rich data set on government spending forecasts in Japan, we provide new evidence on the effects of unexpected changes in government spending when the nominal interest rate is near the zero lower bound (ZLB).

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Economic models, Fiscal Policy JEL Code(s): E, E3, E32, E5, E6, E62

• September 14, 2017 Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal

  Remarks Carolyn A. Wilkins Ottawa, Ontario

  Senior Deputy Governor Carolyn A. Wilkins reviews key themes discussed by participants at the workshop “Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal”.

  Content Type(s): Press, Speeches Topic(s): Central bank research, Financial system regulation and policies, Fiscal Policy, Inflation and prices, Inflation targets, Monetary policy framework

• January 18, 2017 Monetary Policy Report Press Conference Opening Statement

  Opening Statement Stephen S. Poloz, Carolyn A. Wilkins Ottawa, Ontario

  Governor Stephen S. Poloz discusses key issues involved in the Governing Council’s deliberations about the policy rate decision and the MPR.

  Content Type(s): Press, Speeches Topic(s): Fiscal Policy, Inflation and prices, Monetary Policy, Potential output, Recent economic and financial developments, Uncertainty and monetary 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

• June 4, 2016 Monetary/Fiscal Policy Mix and Financial Stability: The Medium Term Is Still the Message

  Remarks Stephen S. Poloz Canadian Economics Association Ottawa, Ontario

  Governor Stephen S. Poloz discusses how the mix of monetary and fiscal policies in an economy has important implications for debt levels and financial stability over the medium term.

  Content Type(s): Press, Speeches Topic(s): Central bank research, Economic models, Fiscal Policy, Inflation targets, Monetary Policy, Monetary policy framework

• 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