Crisis and Calm

This book documents a remarkable yet little-examined time for Canada’s economy and the people who manage it, from the Y2K bug and dot-com boom through the “Great Moderation” of inflation, to the global recession of 2008 and the Covid recession of 2020. Through this period Canada’s dollar hit record highs and lows, borrowing costs fell to record lows, and the bad times through Covid were at risk of becoming another Great Depression without massive intervention that was unthinkable in the early 1930s. Crisis and Calm examines how Canada’s central bank did and what lessons we can draw for the future, against political calls to fire the Governor of the Bank of Canada. The book argues the justification for strong economic policy is radically different in a crisis than in normal times, and in a crisis you must take strong action even if there is some over-adjustment. While monetary policy has been largely effective over the last two decades, especially compared with global peers, there are key ways decisions can be improved.