So, if I may paraphrase one of my late friend’s most famous lines, the appropriate monetary/fiscal policy mix depends on the situation, but the medium term is still the message. References Armstrong, J., R.Black, D. Laxton and D. Rose. 1995. “The Bank of Canada’s New Quarterly Projection Model, Part 2. A Robust Method for Simulating Forward-Looking Models.” Bank of Canada Technical Report No. 73.
Barnett, R. and C. Matier. 2010. “Estimating Potential GDP and the Government’s Structural Budget Balance.” Office of the Parliamentary Budget Officer. Available at http://publications.gc.ca/site/eng/366811/publication.html. Black, R., D. Laxton, D. Rose and R. Tetlow. 1994. “The Bank of Canada’s New Quarterly Projection Model, Part 1. The Steady-State Model: SSQPM.” Bank of Canada Technical Report No. 72. Dorich.