Economic Principles: Inflation, Fiscal Policy, and GFC Report

This report delves into the economic principles of inflation targeting and fiscal policy, using Australia and Canada as case studies. It examines Australia's adoption of inflation targeting since 1993 and its economic outcomes, including inflation and output growth. The report then analyzes Canada's inflation targeting policy introduced in 1991, evaluating its impact on price levels, output volatility, and macroeconomic performance. The analysis extends to the impediments faced by Canada's inflation targeting policy, particularly concerns about financial stability and structural economic changes. Furthermore, the report compares the fiscal policies implemented by both countries during the global financial crisis, detailing stimulus packages, spending initiatives, and their effectiveness in mitigating the crisis's impact. The report concludes by assessing the strategies employed by Australia and Canada to minimize the effects of the 2008 global financial crisis, providing a comprehensive overview of their economic responses and outcomes.