Some counterfactuals  In this section, we use the Bank of Canada’s core policy model, ToTEM (Terms-of-Trade Economic Model) to investigate the significance of the policy mix for some key macroeconomic episodes. ToTEM is a large-scale, multi-sector, dynamic stochastic general-equilibrium (DSGE) model that reflects the consensus view of the key macroeconomic linkages in the Canadian economy (Murchison and Rennison 2006; Dorich et al. 2013).
In particular, ToTEM captures the stockflow dynamics for both government debt and household wealth (and therefore debt) that so preoccupied Doug Purvis. ToTEM represents some 30 years of research effort, beginning (not coincidentally) at about the same time that Doug began to work on these issues.