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  • The underlying premise of the article is that Canada is still in a situation where monetary policy is inadequate and therefore there must be a new fiscal stimulus. The thing is, I don’t see that argument made specifically in the article at all. It says that “interest rates are rising” and suggests this will slow growth but doesn’t explain why they might be rising or what the alternative monetary policy might be.

    If the government introduced a large second stimulus in the present situation then the Bank of Canada would raise interest rates to counteract the potential inflationary pressures this would bring about. If the argument is that this is too rigid a policy of inflation control then that seems like a big thing to note when discussing a potential macroeconomic policy. Given that the current overnight rate is non-zero then it also implies that there is room for some monetary stimulus which is not discussed at all.

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