Spending one's way to growth is nothing new. What is new, and what is a first for almost any developed country is that Canada will be using both monetary and fiscal policy as a way to get the economy growing again at the expense of a balanced budget. For the economy as a whole, it is unequivocally good news.
Price movements have grabbed the headlines in recent weeks. Commodity prices are falling, and as always, there are various arguments about the reasons this time. The implications are serious, so the debates are warranted. But the more pressing issue is recent movement in the general price level. Overall price growth has weakened lately, and there is renewed worry about disinflation and deflation (the dreaded Ds). Five years beyond the crisis, and we are still worried about this? What's going on?
After three-and-a-half years of ho-hum on this front, there is renewed interest in interest rates: where they are going, how fast, and what we need to do to be prepared, if change is indeed in the wind. A lot of the talk is related to another 'up' that scares us: inflation. Talk of rising interest rates is very good news, since it strongly suggests higher confidence in near-future growth.
How the mighty are falling. Resilience was a word used liberally to boast of the BRICS countries' staying power in the post-crisis period. Many even ascribed global-growth-engine status to these rising powerhouses. But 2013 has been a second tough year for the August group, even as OECD nations are steadily returning to growth.
Tired of the long, drawn-out debate on future economic growth? You're in good company. It's a necessary debate, because our individual livelihoods depend on it. But it's a frustrating one, because there's little agreement, and the arguments are oftimes circuitous -- even those made by the "experts." Is there a way out of the analytical quagmires that we are currently up to our axles in?