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This paper introduces heterogeneous beliefs among households in a small open economy model for the Canadian economy. The model suggests that simultaneous boom-bust cycles in house prices, output, investment, consumption and hours worked emerge when credit-constrained mortgage borrowers expect...
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consumer price index has declined in Canada since the early 1980s and is currently close to zero. Taylor (2000) suggests that … due to a change in the parameters of the central bank's policy rule. Evidence is presented for Canada indicating that … suggest that increases in the aggressiveness of policy consistent with that observed for Canada are sufficient to effectively …
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