Canadian fiscal policy shocks reveal surprising economic impacts on society.
The article models different types of fiscal policy changes in Canada to see how they affect the economy. They use a special model to predict how people will react to these changes. By comparing different scenarios, they found that temporary tax increases can have different effects than permanent ones. They also discovered that when the government announces a plan to boost the economy, but the central bank tries to slow things down, it can lead to a recession. Lastly, they looked at how changing corporate taxes could impact Canada's economy.