One of the official goals of central bank monetary policy is supposed to be low employment fostered through what is known as an expansionary policy by lowering interest rates with the hope that low credit rates will encourage businesses to expand their operations by way of capital investment in hard assets or capital expenditures of some sort and new hirings. We’ve had this policy in place for quite some time now, and yet employment really hasn’t improved one iota. If anything it’s merely gotten worse along with – because of the incentive of low interest rates – an astounding increase in personal debt to the unseemly tune (Read more…)
1. He’s Number Two: Stephen Poloz was widely acknowledged in economic and political circles as the second-best choice for the top job at the Bank of Canada. So the surprise was not that he was chosen. The surprise was, Why Not Tiff Macklem? Will someone please find out and tell the rest of us?
2. Doctrinaire [or not?] on Inflation Targeting: He thinks it’s “sacrosanct.” Having studied with monetary policy guru David Laidler at the University of Western Ontario, and been part of the Bank of Canada team that brought inflation targeting to a neighbourhood near (Read more…)
On Tuesday, Statistics Canada reported that job vacancies have fallen to the lowest level recorded since it began collecting these figures two years ago.
On Wednesday, the Bank of Canada projected growth of just 1.5% for this year.
On Thursday, Statistics Canada reported that the number of Canadians receiving Employment Insurance (EI) benefits edged down in February. Meanwhile, the Labour Force Survey indicates that unemployment edged up in February and grew much worse in March.
The combination of rising unemployment and falling EI receipts reduced the proportion of unemployed Canadians receiving benefits to 39.7 per cent in February (Read more…).e. 528,940 beneficiaries out of 1,332,600 unemployed workers). This reduction in EI coverage comes on the heels of new EI restrictions that make it harder for jobless Canadians to access benefits.
This morning, Statistics Canada reported flat wholesale trade and low inflation, providing further evidence of a subdued Canadian economy. Federal . . . → Read More: The Progressive Economics Forum: A Weak Week for Canada’s Economy
Wife of Bank of England governor turns herself into a guillotine-magnet:
Diana Carney – wife of the new Bank of England governor (and former Bank of Canada head) – had a Mary Antoinette moment on March 25, 2013 when she whined on Twitter that she and her husband were having trouble finding suitable housing in London.
British taxpayers are giving her husband Mark Carney an annual salary of £624,000 (more than $959,000 CAD) plus an annual housing allowance of £250,000 (more than $384,000 CAD). No doubt he is also getting a bunch of other benefits and privileges. This is
. . . → Read More: The Ranting Canadian: Wife of Bank of England governor turns herself into a guillotine-magnet
In a very long and fascinating speech which has been amplified by Martin Wolf in the FT, Lord Adair Turner seeks to break the taboo on discussion of the potential ability of central banks to monetize fiscal deficits. His argument boils down to a political economic one … Some monetization might be useful in certain circumstances such as in Japan over the recent past, but there is a clear danger of going too far and stoking inflation if the central bank becomes too subject to political pressures.
He makes the interesting point that QE in the US and the UK
. . . → Read More: The Progressive Economics Forum: Breaking The Taboo on Monetizing Deficits
“The Bank of Canada considered celebrating gay marriages, black hockey players, and turban-wearing RCMP officers on its new plastic bank notes” By Obert Madondo | The Canadian Progressive, Feb. 11, 2013: And so the Harper Conservative-inspired whitewashing of Canada continues. Last summer, we learned that the Bank of Canada had nixed the image of an Asian-looking female scientist from READ MORE
CLC report: Corporate Tax Freedom Day is January 30 – Big businesses hoard cash from tax giveaways, not investing in jobs by Canadian Labour Congress | Jan. 29, 2013 OTTAWA – A research study by the Canadian Labour Congress shows that CEOs in Canada could be dancing in their suites to celebrate Corporate Tax Freedom Day on READ MORE
The Bank of Canada released their January 2013 Monetary Policy Report. Of note, the Bank downgraded its growth expectation for 2013 to 2.0% from 2.3%, and expects the Canadian economy will not reach full potential until late 2014.
Several key points in the January MPR reinforce what progressive economists have been saying about the Canadian labour market.
Since 2010, more than 27% of part-time workers have been “involuntary part-timers”. That means that they are underemployed, working part-time but wanting full-time employment. This graph shows that there has been very little improvement on that front.
Wage increases have been
. . . → Read More: The Progressive Economics Forum: Labour Market still weak: Bank of Canada
I remember way back when when I was in school, not back in the days of the one room schoolhouse but back in the days of the eight classroom schoolhouse with one class for each grade when everyone walked to school, learning about maple trees and maple leaves. We learned about the Norway Maple, and that it’s name came from it’s origins in Norway but I do not recall learning that it was an evil
The Board of Directors of the Bank of Canada have retained Odgers Berndtson to seek a new Governor, and have placed an ad in the Globe and Mail, the Economist and La Presse.
The wording of the advertisement is questionable.
First, it states that “the Bank of Canada is the pre-eminent macro-economic institution in Canada.”
The Bank of Canada is undeniably important, but it has absolutely no role to play in fiscal policy which is entirely the responsibility of the Minister and Department of Finance.
Moreover, the inflation target which anchors monetary policy is set jointly by the
. . . → Read More: The Progressive Economics Forum: What Does the Bank of Canada Do?
Much as I generally promote open access to information, I’m starting to come around to the idea that the Cons should feel free to apply a “national security” exemption to pretty much any information about their decision-making. After all, if anybody around the globe knew exactly what they’re dealing with in the Cons, Canada would all too likely be a second-rate protectorate of Burundi within a week.
Stephen Gordon is at least moderately panicked about the less-than-surprising news that some Lib operatives tried to recruit Mark Carney to serve as the party’s national leader – and there may be worse to come. But I’ll argue that there’s far less to be concerned about than Gordon, Mike Moffatt and others are suggesting.
At the outset, I presume it’s fairly uncontroversial that we have numerous important positions of influence intended to be filled by experts motivated by the public good.
Gordon and Moffatt seem to place the Bank of Canada on a particularly high pedestal, which may be how
. . . → Read More: Accidental Deliberations: On transferable skills
Canada faces near-recession if U.S. plunges over ‘cliff,’ Carney warns “Carney warns of risk from U.S. Bank of Canada Governor Mark Carney has warned that a failure by U.S. politicians to reach a new budget agreement before time runs out would push Canada close to another recession… the bank warned that Canadi ans are still borrowing at a faster pace than their disposable income, making them more vulnerable if they lose their jobs or home prices tumble. The ratio of household debt to gross domestic product now stands at a record high 163 per cent, up from (Read more…) . . . → Read More: Politics and Entertainment: This will be the Regime’s Primary Alibi followed by the EU crisis when the Canadian Economy Sinks into Recession
I support the lawsuit against the Bank Of Canada|Strikes meaningfully at the core of #neoliberalismfacebook.com/Support.lawsui… #cdnpoli #cdnecon — Barry Cameron (@AppalledBC) December 2, 2012 . . . → Read More: Politics and Entertainment: Politics and Entertainment 2012-12-02 10:10:00
Mark Carney’s tenure as Governor of the Bank of Canada overlaps some challenging economy history. Appointed in early 2008 just as the US housing bubble was popping, Carney took the helm in time for a financial crisis that brought the global economy to its knees. We are still living that history in terms of a [...] . . . → Read More: The Progressive Economics Forum: Mark Carney’s tenure and the state of monetary policy
The following is a guest blog from Marc Lavoie and Mario Seccareccia at the University of Ottawa:
In a speech delivered on October 4th to the Winnipeg Chamber of Commerce (see: http://www.bankofcanada.ca/2012/10/speeches/a-measure-of-work/), the senior deputy governor of the Bank of Canada, Tiff Macklen, has offered some self-congratulatory remarks, by arguing that the near-zero inflation policy pursued by the Bank under the leadership of John Crow had given rise to a healthy and more efficient labour market, with low unemployment rates. Senior deputy Governor Macklem has only one regret: labour productivity growth in Canada has been dismal
. . . → Read More: The Progressive Economics Forum: Guest Blog: Selective Amnesia at Bank of Canada
Miscellaneous material for your Monday reading.
- Jim Stanford reviews the effect of NAFTA (and associated corporatist policy choices) on Canada’s economy: Quantity of exports: In the mid-1980s, before Brian Mulroney and Ronald Reagan inked their deal, Canada’s exports to the United States accounted for 19 per cent of Canadian GDP. Today, they account for 19 per cent of Canadian GDP. Any boost to exports from the deal was temporary, and has since been completely reversed.
Composition of exports: In the mid-1980s, most of Canada’s exports to the U.S. consisted of relatively sophisticated manufactured goods (including automobiles, electronics and
. . . → Read More: Accidental Deliberations: Monday Morning Links
A guest blog from Marc Lavoie and Mario Seccareccia, Department of Economics, University of Ottawa
In a speech delivered on October 4th to the Winnipeg Chamber of Commerce (see: http://www.bankofcanada.ca/2012/10/speeches/a-measure-of-work/), the senior deputy governor of the Bank of Canada, Tiff Macklen, has offered some self-congratulatory remarks, by arguing that the near-zero inflation policy pursued by the Bank under the leadership of John Crow had given rise to a healthy and more efficient labour market, with low unemployment rates. Senior deputy Governor Macklem has only one regret: labour productivity growth in Canada has been dismal for a
. . . → Read More: The Progressive Economics Forum: Selective Amnesia at the Bank of Canada
Over the past year, the Canadian labour force has grown by 185,000 people, but we have only added 176,600 jobs. The population grew by 1.2%, but employment only grew by 1%. The unemployment rate has not budged, at 7.3%, a far cry from the pre-recession rate of 6%.
For youth, the picture is worse, with 72,000 fewer youth employed this August compared to last year.
With lackluster private sector jobs growth, and cuts in the public sector at both federal and provincial levels, the situation seems unlikely to improve any time soon.
Corporate tax cuts have not had
. . . → Read More: The Progressive Economics Forum: Tax Cuts, Dead Money, and Lackluster Jobs Growth
The sector and financial-flow accounts released with today’s GDP figures indicate an expansion of the pool of dead money flagged by this blog and by Mark Carney.
The National Balance Sheet Accounts have not yet been released for the second quarter, so we cannot update the accumulated total of $526 billion.
However, the updated Financial Flow Accounts report that private non-financial corporations deposited a further $21 billion of Canadian currency and $2 billion worth of foreign currency in the second quarter. In other words, corporate Canada is adding to its cash stash rather than drawing it down to finance investment.
. . . → Read More: The Progressive Economics Forum: More Dead Money
For novelty value if nothing else, Mark Carney’s appearance at the CAW convention last week was bound to spark lots of attention. After all, we could find no other historical example of a Bank of Canada Governor ever speaking to a union convention. That says something in and of itself, of course. Central bankers speak to audiences of financial leaders and business leaders all the time. (To be fair, Mr. Carney and his predecessors have met regularly with labour reps in private sessions.) Sitting next to Mr. Carney on the podium last week while he
. . . → Read More: The Progressive Economics Forum: Spinning Mr. Carney
Assorted content to end your week.
- Yes, it’s alarming that the Cons are eliminating environmental assessments on a huge number of projects. But even more worrisome is the complete lack of a connection between the basis for the exclusion and the possible environmental impacts: Ottawa is also walking away from conducting assessments on various agricultural and municipal drainage works, log-handling facilities, small-craft harbour and marina development and expansion, the sinking of ex-warships as artificial reefs, the disposal of dredged material, and a 73-hectare mixed-use development on Tsawwassen First Nation lands.
Under the new legislation, BC Hydro also no longer
. . . → Read More: Accidental Deliberations: Friday Morning Links
Kudos to Bank of Canada Governor Mark Carney for raising the profile of the over $500 billion Canadian corporations are holding in excess cash surpluses and not investing in the economy, which garnered front page coverage (and kudos to the CAW for inviting him to speak.)
It’s not the first time he’s raised this concern. Last year at the Empire Club he told assembled business leaders that their companies were in “rude health, have the means to act–and the incentives”, urging them to invest their surpluses. After cutting corporate tax rates, Finance Ministers Flaherty and Duncan have also
. . . → Read More: The Progressive Economics Forum: Dead Money
The new $100 bill featured the image of a woman peering into a microscope. That is until a focus group decided the woman looked, gasp, “Asian.” So, relax, you’re not going to be having any yellow women on your hard-earned huns. The Bank of Canada has laundered the bill, altering the image so the woman no longer looks evil, inscrutable, dangerous. She’s now genuine white bread.
The Harper government decided to attack Thomas Mulcair on the issue of Canadian support for additional IMF resources to deal with the euro area crisis, implying that Canadian taxpayers should not be asked to “bail out” a rich area of the world.
As recounted in Macleans here, on June 8, “Before QP yesterday, the Conservatives used four members’ statements—from Shelly Glover, Randy Hoback, Bernard Trottier and Pierre Poilievre—to lament that Thomas Mulcair would prefer to bail out the “sumptuous European welfare state countries and the wealthy bankers that lend to them”—a “reckless” plan that would apparently “kill jobs and
. . . → Read More: The Progressive Economics Forum: Canada, the IMF and the G20