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Intertemporal Choice, the Public Sector and Canada's Balance of Payments

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  • Gordon R. Sparks

Abstract

This paper analyzes the relationship between the current account deficit in Canada and the public sector deficit. The hypothesis that the public sector deficit is a major determinant of the current account deficit in the U.K. has become known as the New Cambridge approach to the balance of payments. A Fisherian model of intertemporal choice with a detailed public sector is used. We consider the extent public spending is viewed as a direct substitute for private consumption or capital accumulation.

Suggested Citation

  • Gordon R. Sparks, 1981. "Intertemporal Choice, the Public Sector and Canada's Balance of Payments," Working Paper 429, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:429
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