This paper applies real option theory to demonstrate that increased uncertainty in the economic environment due to the Kyoto protocol generates additional inertia in investment decisions which are not taken into account in "traditional" (e.g., Computable General Equilibrium) models. Thus, if...

This paper introduces a dynamic general equilibrium tax model of the Canadian economy. The model incorporates each of the major taxes in Canada and features adjustment dynamics, intertemporal optimization, imperfect substitution between domestic and foreign goods and assets, and industry...

Aiyagari and McGrattan (1998) developed a model in which optimal net government debt in the steady state is positive. This result arises from a particular form of financial market incompleteness: that households cannot buy insurance against prolonged spells of low income. In this paper we extend...

In recent years, neural networks have received an increasing amount of attention among macroeconomic forecasters because of their potential to detect and reproduce linear and nonlinear relationships among a set of variables. This paper provides a highly accessible introduction to neural networks...

When economic data released in late 2001 suggested an economic slowdown, two questions immediately arose: what impact will the slowdown in the economy have on the budgetary balance and to what extent can fiscal policy mitigate this slowdown. The former is concerned with the budgetary position...

It is well known that over the next several decades, there will be significant changes in the age structure of OECD populations. According to recent demographic projections by the United Nations, the share of the old-aged population is expected to double, on average, over the next 50 years in...

Following the 1993 recommendation of the United Nations System of National Accounts, Statistics Canada has switched to using the Fisher chain formula as the official measure to record real expenditure-based GDP in the national accounts in May 2001. This eliminates the substitution-bias problem...

This paper reproduces the works of Hamilton (1983) and the subsequent authors for the Canadian case to assess the empirical relationship between energy prices variations and economic activity in Canada. We use crude oil and natural gas prices (separately and together) as energy prices, and also...

The focus of the paper is on the extent to which human capital formation (specifically, post-secondary education and training) benefits society in general, and productivity growth in particular, over and above its benefit to the individual. The paper provides a comprehensive review of the...