PPG401H1 Lecture Notes - Lecture 3: Distillation, Sensitivity Analysis, Department Of Finance Canada
FISCAL FACTS AND FICTION
Role of Government
Presentation by Mel Cappe
Professor,
School of Public Policy and Governance
University of Toronto
February 7, 2018
The fiscal situation is not good.
Forecasts 2015-16
$3 Billion
$10 Billion
$20 Billion
$30
Billion
September October December January March?
$29.4
Billion
2
November
$25.1
Billion
Global Economic Outlook has been consistently
revised down since 2010
3
Easier to forecast the weather!
Document Summary
Global economic outlook has been consistently revised down since 2010. This was three and a half years ago! Get to balance in : december 20, 2014, december 21, 2015, december 23, 2016, december 22, 2017, december, 2018. A cynic: this is more than optimism bias, you don"t want the public and commentators saying this about the minfin. Yes: deficit shows the current balance, debt shows the cumulative imbalance, debt to gdp shows the capacity to carry the debt. It is actually about the carrying charges: interest on the debt. i=r*d i/y. Intergenerational equity: economic performance, future fiscal and economic flexibility, future equity considerations. High deficits are not in the experience of. High debt to gdp ratio is not in the experience of. Labour markets, input markets, output markets, regional differences etc: good fiscal policy focuses on the long run. Distillation of canadian fiscal policy: was: my reading of harper/flaherty, harper/oliver.
