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...

The works with basic Mundell-Fleming model by adding two dynamic equations, one for the balance of payments (or accumulation of foreign debt) and another for the budget deficit which includes all possible modes of financing.