Op-Eds

By Stephen Gordon Most people probably think of the debate over whether Canada is in a recession as one of those glass-half-full versus glass-half-empty things. Pessimists look at five months of declining GDP and call it a “recession,” while optimists look at increasing employment and say that we’re not in a recession. Yet, the real pessimists are the ones saying we’re not in recession. Making the case that we’re in a recession is basically optimistic: the problems we’re currently experiencing in the economy will be over soon (if it’s not already) and all that is needed it for policymakers to employ the usual array of countercyclical policies. The “no recession” camp is the home of the pessimists: saying that we’re not in recession...
By Steve Ambler and Jeremy Kronick Statistics Canada’s release of preliminary merchandise trade figures for June may provide some closure to the debate on Canada’s so-called recession. After a 4-per-cent fall in export volumes over the first five months of 2015, Canada’s sales to foreigners came roaring back, with a 4.8-per-cent increase in June alone. Imports also decreased in volume by 0.9 per cent from May to June. Overall Canadian economic growth in the first quarter of 2015, as well as the first two months of the second quarter, was negative. The decline in the value of the Canadian dollar in the wake of falling world oil prices had been expected to boost the growth of most other exports, but until June, the numbers had...
Published in the Financial Post on July 28, 2015 Steve Ambler is a professor of economics at the Université du Québec à Montréal and the holder of the David Dodge Chair in monetary policy at the C.D. Howe Institute.Colin Busby and Jeremy Kronick are Senior Policy Analysts at the C.D. Howe Institute in Toronto. No practicing economist defines recession as two consecutive quarters of negative GDP growth Bank of Canada Governor Stephen Poloz occasionally has been described as using immoderate language, as in his description of Canada’s economic performance in the first quarter of 2015 as “atrocious.” More recently, he has received criticism for refusing to speculate on whether Canada is currently in a recession and for...
Published in the Globe and Mail on July 15, 2015 Steve Ambler is David Dodge Chair in monetary policy at the C.D. Howe Institute and professor at the University of Quebec at Montreal. The Bank of Canada’s decision to cut its overnight rate target to 0.5 per cent was expected by many in the wake of the disappointing economic news that’s come since the previous announcement in May. Instead of “a return to solid growth in the second quarter,” as the bank predicted then, gross domestic product growth for the entire second quarter may have been negative. he bank weighs many factors before making a decision on the overnight rate target. The two main ones are the rate of inflation itself and excess capacity in the economy...
Published in the Financial Post on July 9, 2015 By Philip Cross Philip Cross is a Research Fellow at the C.D. Howe Institute. Lower interest rates “cause pervasive mispricing in financial markets” The Canadian and U.S. economy’s unexpected weakness early in 2015 is fanning speculation about lower interest rates, after the Bank of Canada’s surprise cut in mid-January. Before listening to these siren calls for ever more monetary policy stimulus, it would be wise to read the recent annual report of the Bank for International Settlements, the Swiss-based bank for the world’s central banks. Beholden to no government, the BIS speaks with a refreshingly candid, clear and unconventional voice. The BIS report openly...