“Golden Years” in Canada Provide a Model for Economists, Academics
“Golden Years” in Canada Provide a Model for Economists, Academics
Distinguished economists and academics from Canada, Italy, the U.S. and around the world came together for the third biennial “Rimini Conference on the Canadian Economy”.
Under the theme of: “The Canadian Economy 15 Golden Years in the Global Context”, this year’s gathering organized by the Rimini Center for Economic Analysis (RCEA) shared lessons learned from Canada’s recent economic performance and management, and its response to the recent global financial crisis.
Delivering important lessons learned
The panel session delivered significant lessons learned for all participants to consider. Topics of discussion included: ‘Canadian Monetary Policy: Lessons from the Crisis;’, ‘Canadian Growth: Contemporary Issues of Productivity Growth and Development in a Global Perspective;’ a ‘Comparison of Canadian and Italian Fiscal Approaches and Outcomes’ and ‘The Obama Health Care Reform and Medicare’.
With the lowest debt-to-GDP ratio among the G7 nations today, Canada continues to manage its economy with a sound mix of fiscal and monetary policies and a long-term view, and clearly communicates to the Canadian public what must be done to eliminate deficits.
Based on that experience, Canadian experts were able to share some key points:
- Unconventional monetary tools were helpful in stimulating the Canadian economy.
- Central banks must give more weight to monitoring financial stability.
- Regulation of financial institutions matters, but governments must go beyond looking at risks on an institution-by-institution basis and also look at the interactions and potential for macro-systemic risks.
- Canada’s successful turnaround from a precarious debt-to-GDP ratio in the early 1990s laid the foundations for ongoing sound macro-economic management.
Drawing from Canada’s experience of sustained long-run growth and an effective response to the recent global financial and economic crisis, the conference also dealt with trade, finance and economics issues.
The challenge of stabilizing inflation while at the same time preventing excessive risk taking; the need to prevent a false sense of security by combining stable growth in both output and price levels (the “Great Moderation”), so as to prevent excessive risk-taking and, ultimately, a financial crisis; and whether central banks should create price level variability in order to keep investors’ “feet to the fire” were all issues that generated much discussion.
Conclusions focus on Canada’s regulatory framework
The panel sessions resulted in a number of conclusions about best practices and key aspects that need to be addressed. For example, the participants concluded that the lack of a financial crisis in Canada was in part a consequence of Canada’s more active regulatory framework, which allowed traditional monetary policy to work during the crisis.
They found that given the aging population and resulting increases in pension and health expenditures in developed countries, fiscal reform is urgently needed; Canada’s experience in the 1990s shows that with the right policies, it can be done.
The participants also discussed the state’s possible objectives in providing health care to its citizens, the ways in which major countries in the OECD go about achieving those objectives and, in particular, how the U.S. is now undergoing reform to ensure that its citizens have access to health insurance.
The conference was made possible through a $20,000 Understanding Canada Grant supported by the Embassy of Canada in Italy. It was organized by Prof. Gianluigi Pelloni of the Rimini campus of the University of Bologna, which is host to one of the five Canadian Studies Centres in Italy.
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