Hard Money, Hard Times

Author:  Lars Osberg And Pierre Fortin

dscf0030A zero inflation policy has resulted in a high unemployment.

This results in a fall in household incomes. There is a downward pressure on wages due to depressed labor markets. The availability of qualified employees grows, which allows employers to implement a just in time labor strategy. They start hiring part time, casual and contract workers. People in these positions face greater insecurity of income flows as well as depressed expectations of earnings. Families become destabilized, crime increases and so does the divorce rate. The Bank of Canada should be reformed. How can one governor have so much power and responsibility? The track record has been lackluster. A solution would be to replace the governor with a governing council. Each member would be appointed from each province in order to reflect Canada’s diversity and differing points of view. They would operate by majority vote and members would rotate as chair of the committee, and supported by a research staff of economists.

 

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