An evaluation of three alternative fiscal anchors for Canada
Author
Faculty Advisor
Date
2022
Keywords
fiscal policies, Canadian governments, fiscal anchors
Abstract (summary)
In this paper, we evaluate three fiscal anchors that Canadian governments could adopt—a debt reduction target, a ceiling on the ratio of interest payments to revenues, and a balanced budget rule—balancing the primary budget either through expenditure restraint or tax increases. We simulate the adoption of these fiscal anchors using an economic model in which governments’ fiscal policies affect the growth rate of the economy and the real interest rate on public debt. Each scenario has different implications for government debt ratios, economic growth rates, and real interest rates on government debt from 2025 to 2050.
Publication Information
Dahlby, B., Ferede, E., &Fuss, J. (2022). An Evaluation of Three Alternative Fiscal Anchors for Canada. The Fraser Institute https://www.fraserinstitute.org/studies/an-evaluation-of-three-alternative-fiscal-anchors-for-canada
DOI
Notes
Item Type
Report
Language
Rights
Attribution-NonCommercial-ShareAlike (CC BY-NC-SA)
