Groups such as this one serve many important purposes, not the least of which is the development of trading links that help to strengthen the economies of both our countries. Creating and strengthening international trading links has been one of the keys to the success of the Canadian economy in recent years. But there is much more to the story.
There is evidence that broadly these kind of expenditure rules, when complemented with other fiscal rules, have been successfully applied in many countries.2 Regarding the design of the rules in general, it is important that they are based as much as possible on observables, and not on un-observables such as output gap and potential output.