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Interest Rates, Unemployment and Inflation in the 1990s: The Canadian Experience

In: The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

Author

Listed:
  • Pierre Fortin

    (Professor of Economics at the Universite du Quebec, Montreal)

Abstract

In this chapter, Pierre Fortin provides a critique of the conduct of Canadian monetary policy in the 1990s, a critique that he developed throughout the decade. While not denying that the US economic slowdown in the early 1990s reduced growth in Canada, Fortin lays the blame for the inferior economic performance of the Canadian economy relative to the U.S. economy squarely on the back of the Bank of Canada, and dismisses structural explanations of the recession as lacking an empirical basis.

Suggested Citation

  • Pierre Fortin, 2001. "Interest Rates, Unemployment and Inflation in the 1990s: The Canadian Experience," The Review of Economic Performance and Social Progress, in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s, volume 1, Centre for the Study of Living Standards;The Institutute for Research on Public Policy.
    • Handle: RePEc:sls:repsls:v:1:y:2001:pf
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    File URL: http://www.csls.ca/repsp/1/06-fortin.pdf
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    References listed on IDEAS

    as
    1. Tiff Macklem, 1997. "Capacity constraints, price adjustment, and monetary policy," Bank of Canada Review, Bank of Canada, vol. 1997(Spring), pages 39-56.
    2. P Clark & D Laxton, 1997. "Phillips Curves," CEP Discussion Papers dp0344, Centre for Economic Performance, LSE.
    3. Charles Freedman & Tiff Macklem, 1998. "A Comment on "The Great Canadian Slump"," Canadian Journal of Economics, Canadian Economics Association, vol. 31(3), pages 646-665, August.
    4. Gordon Thiessen, 1995. "Uncertainty and the transmission of monetary policy in Canada (HERMES-Glendon Lecture) [speech]," Bank of Canada Review, Bank of Canada, vol. 1995(Summer), pages 41-58.
    5. Joseph Stiglitz, 1997. "Reflections on the Natural Rate Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 3-10, Winter.
    6. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, vol. 62(1), pages 1-18, March.
    7. Duguay, Pierre, 1994. "Empirical evidence on the strength of the monetary transmission mechanism in Canada: An aggregate approach," Journal of Monetary Economics, Elsevier, vol. 33(1), pages 39-61, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mathieu Dufour & Ellen Russell, 2015. "Why Isn't Productivity More Popular? A Bargaining Power Approach to the Pay/Productivity Linkage in Canada," International Productivity Monitor, Centre for the Study of Living Standards, vol. 28, pages 47-62, Spring.
    2. Kenneth I. Carlaw & Richard G. Lipsey, 2013. "Does History Matter? Empirical Analysis of Evolutionary Versus Stationary Equilibrium Views of the Economy," Economic Complexity and Evolution, in: Andreas Pyka & Esben Sloth Andersen (ed.), Long Term Economic Development, edition 127, pages 137-174, Springer.
    3. Scott Aquanno & Jordan Brennan, 2016. "The Politics of Canadian Monetary Policy: Reassessing Canadian Inflation, Part II," Journal of Economic Issues, Taylor & Francis Journals, vol. 50(3), pages 814-833, July.

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    More about this item

    Keywords

    Monetary Policy; Inflation; Inflation Reduction; Inflation Policy; Growth; Recession; Well-being; Wellbeing; Well Being; Unemployment; NAIRU; Phillips Curve; Canada;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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