In contrast, a fiscally-neutral increase in public investment would deliver the long-term gains without inducing short-term overheating. Conclusions Successful macro-financial policymaking requires a dual focus on managing cyclical volatility and addressing the strategic challenges that ultimately determine long-term economic and social outcomes. In relation to the former, both macroprudential and fiscal policies can contribute to cyclical stabilisation.
As acknowledged in various G-20 communiqués, growth has been neither strong, nor sustainable nor balanced. Shortly after the crisis and the announcement of the G-20 Framework, economists at the Bank of Canada decided to use their global model to examine three very different scenarios for how the global economy might unfold.