C.D. Howe Institute Business Cycle Council Issues Authoritative Dates for the 2008/2009 Recession
The newly established C.D. Howe Institute Business Cycle Council has determined authoritative dates for the onset of the 2008/2009 recession and the resumption of economic growth in Canada. Based on a careful analysis of key economic indicators, the Council determined that the recession started in November 2008 and lasted seven months until May 2009. As a foundation for further work on business cycles, the Council has also agreed on a common set of reference dates for historical recessions in Canada starting in 1929.
The Institute created the Business Cycle Council to act as an arbiter of business cycle dates in Canada. It comprises a panel of expert business and academic macroeconomists and economic historians.…
Turning Points: Business Cycles in Canada since 1926
Market-based economies tend to exhibit cyclical behaviour. The recent financial crisis, with devastating impacts that are still being felt today, has added urgency to the drive to improve our understanding of business cycles. Pinpointing key turning points in the economy, meaning when recession takes hold or  growth resumes, is vital for policymakers, businesses and consumers […]Housing Bubbles and the Consumer Price index: A Proposal for a Better Inflation Indicator
The Bank of Canada needs a better inflation indicator that is more sensitive to swings in house prices than the Consumer Price Index (CPI), according to a new report from the C.D. Howe Institute. In “Housing Bubbles and the Consumer Price Index: A Proposal for a Better Inflation Indicator,” Philippe Bergevin points out the CPI […] Consumer debt: concerning but not critical: Financial Post Op-Ed
Published in the Financial Post on April 11, 2012
By Philippe Bergevin and James MacGee
As a percentage of income, Canadian household debt levels are higher than at any point in recent history and now higher than those of U.S. households. This raises concerns over the sustainability of household finances, the risks to the broader economy and the merits of government intervention.
Recent debate has understandably focused on the housing market and on the risks associated with household mortgage debt. But consumer credit, which excludes mortgages but includes household debt such as auto loans, credit card debt and lines of credit, has risen by more than a factor of five since the late 1970s and, at 43% of disposable…
Core, What is it Good For? Why the Bank of Canada Should Focus on Headline Inflation
The Bank of Canada should place less emphasis on the “core” Consumer Price Index (CPI) in explaining its policy choices, according to a report released today by the C.D. Howe Institute. In, “Core, What is it Good For? Why the Bank of Canada Should Focus on Headline Inflation,” authors Philippe Bergevin and Colin Busby say […] Are We Ready for that Double Dip? Financial Post Op-Ed
Published in the Financial Post on August 19, 2011
By Philippe Bergevin and Finn Poschmann
In Ottawa Friday, Minister of Finance Jim Flaherty and Bank of Canada governor Mark Carney gave their updates on the Canadian economy. The big question: How does the darkened global picture affect Canada’s economic prospects and the federal government’s ability to return to a balanced budget on schedule?
By most accounts, the Canadian economy is doing well. The United States entered recession, defined as a significant decline in economic activity, in December 2007 (see graph above). Canada entered recession later, in fall 2008.
And Canada’s recession was shorter: the U.S. economy contracted for 18 months, while the…
When Nightmares Become Real: Modelling Linkages Between The Financial Sector And The Real Economy In The Aftermath Of The Financial Crisis
Our understanding of the links between the financial sector and the rest of the economy needs to improve, concludes a report from the C.D. Howe Institute. In When Nightmares Become Real: Modelling Linkages between the Financial Sector and the Real Economy in the Aftermath of the Financial Crisis, authors Philippe Bergevin, Pierre Duguay and Paul Jenkins […]Overnight Moves: The Bank of Canada Should Start to Raise Interest Rates Now
The time is right for the Bank of Canada to start raising interest rates, according to a report from the C.D. Howe Institute. In “Overnight Moves: The Bank of Canada Should Start to Raise Interest Rates Now,” leading monetary economist Michael Parkin warns that delayed action poses risks and the prospect of “ugly policy choices” […]Boom-and-Bust Alberta Needs Stabilization Fund: Edmonton Journal Op-Ed
Published in the Edmonton Journal on November 8, 2010
By Stuart Landon And Constance Smith
The government of Alberta’s revenue volatility turns ordered plans topsy-turvy. Highly variable revenues make it difficult for the government to achieve a sustainable level of spending. Instead, Alberta’s spending tends to follow a boom-and-bust pattern — expenditures rise when oil and gas prices are high and abate when prices fall.
The rapid expansion of programs and capital spending during revenue booms stretches the capacity of the government to provide services and monitor spending, which can lead to waste and inefficiency. During a revenue collapse, spending cuts are often across the board rather than focused on the…