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 […]
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The Progressive Economics Forum: Prices Decline Yet Again
Statistics Canada reported today that, for a third consecutive month, consumer prices declined and the inflation rate fell below 2%. In July, the inflation rate was 1.3% and the Bank of Canada’s core rate was 1.7%. Gasoline and natural gas prices, which have been lower this summer than last, dragged
Continue readingThe Progressive Economics Forum: Saskatchewan’s Rising Cost of Living
Today’s Consumer Price Index provides further evidence of Saskatchewan’s rising cost of living. Among the provinces, Saskatchewan is tied for the second-highest annual inflation rate: 2.0%. Consumer prices decreased in June from May in nine provinces (all except Alberta). But Saskatchewan was tied for the smallest monthly price decline: -0.3%.
Continue readingThe Progressive Economics Forum: CPI Deflates Case for Rate Hike
Today’s report that the national inflation rate fell to 1.2% in May deflates calls for higher interest rates to reduce inflation. The central bank’s core rate was 1.8%, also below the 2% target. The other argument for an interest-rate hike was to moderate mortgage lending and the housing market. However,
Continue readingThe Progressive Economics Forum: Inflation On Target; Exchange Rate Off Target
Today, Statistics Canada reported an annual inflation rate of 2%, precisely in line with the Bank of Canada’s target. With inflation under control and renewed risks to the global economy, there is little rationale for the central bank to raise interest rates anytime soon. In fact, the Bank of Canada
Continue readingThe Progressive Economics Forum: Quebec Tuition: Between a Rock and Hard Place?
In the context of student protests over Quebec tuition fees, my friend Luan Ngo has just written a very informative blog post on Quebec’s fiscal situation. While I encourage readers to read his full post, I do want to use the present space to make mention of three important points
Continue readingThe Progressive Economics Forum: Deflating the Monetary Hawks
Canada’s business press has recently been filled with speculation that the Bank of Canada may soon hike interest rates based on its somewhat more optimistic economic outlook. But today’s Consumer Price Index report indicates that there is no need to raise interest rates. Statistics Canada reported that both headline and
Continue readingThe Progressive Economics Forum: Inflation Central
Statistics Canada reported today that consumer prices edged up by 0.1% in February on a seasonally-adjusted basis, bringing the annual inflation rate to 2.6% and the core inflation rate to 2.3%. These rates are within the Bank of Canada’s target range and should allow it to keep interest rates low,
Continue readingAccidental Deliberations: Friday Morning Links
Assorted content to end your week. – Susan Riley brilliantly slams the message that austerity is necessary for everybody but those who already have the most: Is anyone else getting tired of being lectured about austerity by wealthy consultants in expensive suits who charge $1,500 a day for their advice
Continue readingThe Progressive Economics Forum: Inflation and Drummond
Statistics Canada reported today that consumer prices jumped in January (by 0.4% or 0.5% seasonally-adjusted), offsetting the drop in December. As a result, the annual inflation rate is now 2.5% and the Bank of Canada’s core inflation rate is 2.1%. Monetary Policy Both measures are well within the central bank’s
Continue readingThe Progressive Economics Forum: Recalculating inflation: billions in savings for governments and employers paid for by workers and pensioners
The top story in the Globe and Mail today reports on something I warned about a year ago: Statistics Canada is making changes to the way it calculates the Consumer Price Index. At that time I suspected changes to calculations of the CPI would be introduced as part of the renewal
Continue readingThe Progressive Economics Forum: Lower Inflation Frees Carney’s Hand
Statistics Canada reported today that consumer prices decreased in December, lowering the annual inflation rate to 2.3%. The Bank of Canada’s core inflation rate declined to 1.9%. Tame inflation leaves room to lower interest rates. If unemployment continues to rise, the Bank of Canada should reduce interest rates to boost
Continue readingThe Progressive Economics Forum: Economic Climate and Inequality
The December issue of the quarterly Economic Climate for Bargaining publication I produce is now on-line. This issue has a number of pieces on issues of inequality, including: Rising inequality is hurting our economy Labour rights, unions and the 99% Canadian economy bleeding jobs; public sector cuts to intensify Recession
Continue readingThe Progressive Economics Forum: Modest Inflation Outstrips Wages and Canada Social Transfer
Statistics Canada reported today that the annual inflation rate remained 2.9% and the Bank of Canada’s core rate remained 2.1% in November. The monthly increase in consumer prices slowed to 0.1% in November from 0.3% in October. The monthly increase in core prices slowed to 0.1% in November from 0.2%
Continue readingPolitics and Entertainment: Jobs Waning, Debt Mounting, Wages Slipping: A Bleak Outlook
Here are some followup comments that supplement my last post. The emerging picture of the Canadian economy is bleak. Inscribed as every government in the Western world is in neoclassical economic policy that shapes the global economy, the blame can be easily spread around, but our own government could be
Continue readingThe Progressive Economics Forum: Inflation Targeting and the Crisis
Many long-held tenets of neoclassical orthodoxy have fallen by the wayside in the past 3 years, but perhaps one of the biggest dominos that is at least teetering precariously (if not fully tipped over) is the consensus that inflation targeting should be the exclusive focus of monetary policy. The policy
Continue readingNGDP targeting: wither monetarism?
Monetarism is like a Zombie: it can be found theoretically wanting, empirically false and technically infeasible but in one form or another it just soldiers on. In some ways the hype surrounding the conversation about the possibility of moving from … Continue reading →
Continue readingThe Progressive Economics Forum: The Inflation-Control Target
So, the 2% inflation target has been renewed as it now stands. (Take that, House of Commons Finance Committee, which is holding hearings on the issue next week.) The background report from the Bank of Canada is pretty self-congratulatory, though it does somewhat revise the current regime to underline the point that monetary policy also […]
Continue readingThe Progressive Economics Forum: MYTHOLOGIES: MONEY AND HYPERINFLATION
In an earlier post, Marc Lee mentioned in passing the German hyperinflation episode of the 1920s. It’s remarkable that this event still holds such sway over the popular imagination despite other more recent instances of hyperinflation. Certainly, the imagery is powerful: German citizens pushing wheelbarrows full of worthless paper money around for everyday purchases, banknotes […]
Continue readingRedBedHead: The Tories’ Bankrupt Brains
“I see, said the blind man to the deaf dog, who wasn’t listening anyway” is a phrase that comes to mind reading reports of federal Finance Minister Jim Flaherty’s press conference on the economy. Generally speaking we expect governments to do more to s…
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