Estimates of potential GDP are crucial for monetary and fiscal policymakers who require estimates of the economy’s capacity to gauge inflationary pressures and to assess the budgetary position over the business cycle. Unfortunately, an economy’s potential GDP and output gap are not directly observable and therefore must be estimated. Fortunately the Department of Finance and the Bank of Canada construct estimates of potential GDP which are used in their respective policy analyses and deliberations.
However, given the absence of published estimates over the forecast horizon 2008-2013, it is necessary to construct them.
Future potential growth is assumed at 2.4% annually and an upper bound of 2.7% and lower bound of 2.1% are also considered. This range is consistent with estimates of potential growth provided by private sector forecasters and the Bank of Canada. -The Budgetary Balance and the Economic Cycle December 18, 2008
March 6, 2009 - Global fiscal stimulus is essential now to support aggregate demand and restore economic growth. The International Monetary Fund has called for fiscal stimulus in as many countries as possible, including emerging market and advanced economies. This paper uses simulations with a multi-country structural model to show that worldwide expansionary fiscal policy combined with accommodative monetary policy can have significant multiplier effects on the world economy.-INTERNATIONAL MONETARY FUND
July 6, 2009 - Given the revised economic outlook, updated assumptions, and announced post-budget measures, PBO is now projecting cumulative budgetary deficits of $155.9 billion over the 5-year projection period 2009-10 to 2013-14. The budget deficit is expected to peak at $48.6 billion (3.2 per cent of GDP) in 2009-10, improving to $16.7 billion (0.9 per cent of GDP) by 2013-14. Economic and Fiscal Assessment
November 2009 - Reflecting the better-than-expected employment performance since May and upward revisions to real GDP growth, private sector forecasters have revised down their outlook for the unemployment rate in the near term (Table 1-4). Based on the September 2009 PBO survey, forecasters expect the unemployment rate to average 8.4 per cent in 2009 and 8.9 per cent in 2010 – lower than the 8.7 per cent and 9.4 per cent, respectively, expected in the June survey. Economic Fiscal Update
April 9, 2010 - March’s employment increase brings total gains to 176,000 (+1.1%) since July 2009. Employment edged up by 18,000 in March, continuing an upward trend that began in July 2009. The unemployment rate remained unchanged at 8.2%.- Labour Force Survey
April 08, 2010 - This isn't a news story about some staffer writing a letter to the editor supporting her boss, again, dredged up by some tragic hope that it will distract Canadians from the growing obvious - that the country is in good hands, and that the Liberal party has nothing new to offer. -Searching For Liberty
April 10, 2010 - Where the Helena Guergis media frenzy is most beneficial to Liberals is that it is distracting attention away from our sensational economic recovery. - The Iceman This story should be shouted from the rooftops because it affects every Canadian unlike other stories that the Lame Stream Media's been focused on lately. - Chasing Apple Pie
Priorities can be a problem for some political parties.
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