E-book
Provincial solvency and federal obligations [electronic resource] / Marc Joffe ; foreword by Don Drummond.
Summary:
Provides a number of important lessons for Canadian fiscal policy authorities at the federal, provincial and territorial levels. The analysis suggests that the combination of future economic conditions, featuring more modest output increases than historically, and "status quo" policies, in particular the continuation of fairly rapid growth in health care spending, will put a number of provinces into debt positions that could lead to defaults. Interestingly, Alberta, despite its current net asset position, has the highest longer-term default probability. If credit rating agencies and markets share the perspectives from this report's analysis, then in theory the provinces should be facing higher interest rate spreads over federal rates. The author surmises that the relatively low spreads observable vis-a-vis federal rates are due to the assumption that the federal government will bail out any defaulting provincial government, as was done on several occasions in the 1930s. The complex analysis leading to this conclusion leaves a lot of room for question. Perhaps the agencies and markets believe provinces will act more responsibly to correct soaring debt than implied by the report's mechanical extrapolations. Perhaps they don't accept the study's definition of what debt burdens lead to high default risk. Nonetheless, the study does bring to our attention a number of very important issues that are highly relevant to current and future fiscal policy in Canada.
Record details
- Physical Description: 1 electronic text (48 p.) : digital file.
- Publisher: Ottawa, Ont. : Macdonald-Laurier Institute, 2012
Content descriptions
- General Note:
- "October 2012."Issued as part of the desLibris documents collection.
- Bibliography, etc. Note:
- Includes bibliographical references.
- Formatted Contents Note:
- Foreword -- Executive summary -- Introduction -- Outstanding debt by province -- Current yields and spreads on provincial debt -- Theoretical interest rates in the absence of federal support -- Conclusion -- Appendix A. More on interest rate decomposition -- Appendix B. Evidence from past defaults and fiscal crises -- About the author.
- System Details Note:
- Mode of access: World Wide Web.
- Language Note:
- Summary in English and French.
Search for related items by subject
- Subject:
- Canadian provinces > Economic conditions.
Debts, Public > Canada.
.........
Canada > Economic policy. - Genre:
- Electronic books.
Search for related items by series
Electronic resources
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| 100 | 1 | . | ‡aJoffe, Marc. |
| 245 | 1 | 0. | ‡aProvincial solvency and federal obligations ‡h[electronic resource] / ‡cMarc Joffe ; foreword by Don Drummond. |
| 260 | . | ‡aOttawa, Ont. : ‡bMacdonald-Laurier Institute, ‡c2012 ‡e(Ottawa, Ontario : ‡fCanadian Electronic Library, ‡g2013). | |
| 300 | . | ‡a1 electronic text (48 p.) : ‡bdigital file. | |
| 500 | . | ‡a"October 2012." | |
| 500 | . | ‡aIssued as part of the desLibris documents collection. | |
| 504 | . | ‡aIncludes bibliographical references. | |
| 505 | 0 | . | ‡aForeword -- Executive summary -- Introduction -- Outstanding debt by province -- Current yields and spreads on provincial debt -- Theoretical interest rates in the absence of federal support -- Conclusion -- Appendix A. More on interest rate decomposition -- Appendix B. Evidence from past defaults and fiscal crises -- About the author. |
| 520 | 3 | . | ‡aProvides a number of important lessons for Canadian fiscal policy authorities at the federal, provincial and territorial levels. The analysis suggests that the combination of future economic conditions, featuring more modest output increases than historically, and "status quo" policies, in particular the continuation of fairly rapid growth in health care spending, will put a number of provinces into debt positions that could lead to defaults. Interestingly, Alberta, despite its current net asset position, has the highest longer-term default probability. If credit rating agencies and markets share the perspectives from this report's analysis, then in theory the provinces should be facing higher interest rate spreads over federal rates. The author surmises that the relatively low spreads observable vis-a-vis federal rates are due to the assumption that the federal government will bail out any defaulting provincial government, as was done on several occasions in the 1930s. The complex analysis leading to this conclusion leaves a lot of room for question. Perhaps the agencies and markets believe provinces will act more responsibly to correct soaring debt than implied by the report's mechanical extrapolations. Perhaps they don't accept the study's definition of what debt burdens lead to high default risk. Nonetheless, the study does bring to our attention a number of very important issues that are highly relevant to current and future fiscal policy in Canada. |
| 538 | . | ‡aMode of access: World Wide Web. | |
| 546 | . | ‡aSummary in English and French. | |
| 650 | 0. | ‡aCanadian provinces ‡xEconomic conditions. | |
| 650 | 0. | ‡aDebts, Public ‡zCanada. | |
| 650 | 7. | ‡a......... ‡2Iptcnc | |
| 651 | 0. | ‡aCanada ‡xEconomic policy. | |
| 653 | 0. | ‡aAlberta | |
| 653 | 0. | ‡aBond | |
| 653 | 0. | ‡aDebt | |
| 653 | 0. | ‡aInterest | |
| 653 | 0. | ‡aInterest rates | |
| 653 | 0. | ‡aLatin american debt crisis | |
| 653 | 0. | ‡aMonetary policy | |
| 653 | 0. | ‡aProvinces and territories of canada | |
| 653 | 0. | ‡aRisk | |
| 653 | 0. | ‡aSecurity | |
| 655 | 0. | ‡aElectronic books. | |
| 710 | 2 | . | ‡aMacdonald-Laurier Institute for Public Policy. |
| 710 | 2 | . | ‡aCanadian Electronic Library (Firm) |
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