Using Financial Market Information to Enhance Canadian Fiscal Policy-Reference-Cited by-同舟云学术

Using Financial Market Information to Enhance Canadian Fiscal Policy

Published:2006-06 Issue:2 Volume:6 Page:151-185
ISSN:1523-9721
Container-title:Public Finance and Management
language:en
Short-container-title:Public Finance and Management

Author:

Lloyd-Ellis Huw¹,Zhu Xiaodong²

Affiliation:

1. Department of Economics Queen's University

2. Department of Economics University of Toronto

Abstract

In this article we argue that the evaluation and implementation of Canadian fiscal policy could be significantly improved through the systematic use of information provided by global financial markets. in particular, we show how the information contained in internationally traded asset returns can be used to (1) provide a more meaningful cyclical-adjustment of the budget deficit, (2) assess the sustainability of the public debt, and (3) reduce the risk of the debt becoming unsustainable without having to run excessively large surpluses.

Publisher

SAGE Publications

Link

https://journals.sagepub.com/doi/pdf/10.1177/152397210600600201

Reference21 articles.

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2. BlanchardOlivier J., JohnsonDavid, and MelinoAngelo, 2003. Macroeconomics. 2nd Canadian Edition, Prentice Hall: Toronto.

3. BruceN. and PurvisD. 1985. “Consequences of Government Budget Deficits.” in SargentJ. (ed.) Fiscal and PolicyMonetary, Collected Research Studies of the Royal Commission on the Economic Union and Development Prospects for Canada, Vol. 21 (Toronto: University of Toronto Press).