MEREDITH: Dissecting Carneynomics - Part One

In the first of a multi-part series, Tyler Meredith explains and dissects the fundamentals of “Carneynomics.” Part One examines Carney’s revival of fiscal rules. 

Key Points: 

• Based on the “golden rule” borrowed from the UK, Carney’s goal is to change the composition of spending rather than just the level of spending. Borrowing, in this model, becomes a lever for future capacity, not a tool for present consumption.
• The goal is to shift spending away from operational government expenses and transfers, reversing a national trend of under-investment. 
• The shift shows that Carney values fiscal transparency, and ultimately Canadians will have to decide whether they want this shift to spending focused on future productive capacity rather than present consumption. 

As the government begins to roll out details of its first major economic and fiscal policy moves, it will be important to step back to assess what we can learn about a  “new” government that is still maturing, what they mean in practice and the implications for future policy making. We will ignore the politics and punditry and delve into the details of how this affects public administration, advocacy and policy design.