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| Page 284 With lower tax rates in the economy, the impact of automatic stabilizers will be somewhat reduced. Page 290 Over the past few decades, there has been a significant increase in the proportion of income withdrawn by governments (due to higher tax rates) and by the rest of the world (due to higher levels of foreign trade). The result has been a rise in the Canadian economy’s MPW and therefore a fall in the value of the spending multiplier. Page 296 A protracted period of budget surpluses not only reduces public debt directly, it also causes a reduction in public debt charges, which causes public debt to fall even more quickly. This has been the case in Canada during most years over the past decade. |