Candadian Deficits and Debt: Is It True The Politicians Say?
The paper provides an analysis of Canadian deficits and debt since the early 1980s. It presents some suitable adjustments to defict measurements and considers the validity of four explanations of deficts: Ricardian equivalence, tax and spend, Keynesian, and Neoclassical. The Neoclassical view seems to dominate the results. It also identifies expressions for the rate of growth of debt and debt charges ratios and a measure of sustainability for deficit ratio. The conclusion is that political action reacted too late to stop the rise of these ratios.
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