Canadian Economy In Recent Years, Term Paper

Length: 4 pages Sources: 5 Subject: Economics Type: Term Paper Paper: #2388517 Related Topics: Fiscal Policy, International Political Economy, Monetary Policy, Public Finance
Excerpt from Term Paper :

According to Longworth, "the reason (the bank) insist on keeping inflation in line is because this is the best contribution the bank can make to a healthy economy." In other words, keeping inflation low, stable and predictable is key to keeping the economy "on the smoothest possible track for long-lasting economic growth and job creation," says Longworth. By doing this, the Canadian public and private monetary policy is able to avoid an inflationary "boom-and-bust" cycle is one of the leading causes to recessions and increased rates of unemployment. "To put it another way, the Bank's focus on inflation means that the gap between the potential and actual performance of the economy can be kept as narrow as possible."

III. The Negative Side of the Canadian Economy

On the flip side of the careful monetary policy planning is the government's fiscal policy planning, or, according to some, lack of planning. According to Pierre Fortin, Canada is currently facing a looming fiscal problem that is essentially macroeconomic in nature. According to Fortin, the essential problem for Canada is its uncontrolled public debt, which is fourth behind only Belgium, Greece and Italy. Fortin states that the rising government indebtedness has "three major consequences." First, over time it will make the country poorer due to its crowding out of investment and foreign debt and higher tax rates. Second, the public finance sectors, such as discussed above, will become destablilized and more sensitive to variations in interest rates. Finally, the expanding interest payments on these debts require citizens to receive "declining amounts of public goods and services in exchange for rising taxes." This generates deep frustration and "contaminates the quality of democratic life." Because all three of these elements are starting to show signs of existence in Canada, the excellent standing of Canada's economy that exist today is in jeopardy.

IV. The Increase in Foreign Investment

As a result of Canada's strong economic status, many foreign investors have been attracted to the country, which has led to numerous foreign corporate takeovers. However, according to research and economic development than domestic firms. Thus, because of the strong and diverse economic backdrop of Canada, it has developed an economy which has appealed to foreign investors, in which has led to the creation of an even stronger economy. (Vieira, 2007).

Even despite this increase in foreign investors, for the past two decades the annual rate of growth for investments made abroad by Canadians has been around 11%. This is in comparison to the 8% invested by foreigners. Thus, as more foreign investors are investing in Canada, Canada continues to invest heavily in foreign markets. Thus, the effect is that Canada continues to have an import/export economy: it imports investments and exports its own investments on an almost balanced ration.

V. Conclusion

As can be seen, Canada's diverse economic structure and policy structure is what has led to the nation's current economic status. Further, because Canada has established itself as a traditionally stable economic and business environment, it has attracted the investments of many multinational corporations. This, of course, has led to an increase in corporate takeovers. Despite what the popular opinion may suggest, that these takeovers will cause a hollowing out of the Canadian economy, statistical studies have in fact showed the opposite as being true. Instead of international takeovers as being a threat, the attention of economic nay sayers should focus on the real threat to the Canadian economy: International Debt.

Works Cited

Central Intelligence Agency. (2005): CIA World Factbook: Canada. Washington, D.C.: U.S. Government Publishing.

Fortin, Pierre. (1995). The Canadian Fiscal Problem: The Macroeconomic Connection. Atlantic Economic Journal.

Howlett, Michael and M. Ramesh. (1992). Political Economy of Canada: An Introduction. Toronto: McClelland and Steward.

Longworth, David. (2007). Canadian Monetary Policy.

A www.About.com:Economics.

Vieira, Paul. (2007): "Little Evidence of…

Sources Used in Documents:

Works Cited

Central Intelligence Agency. (2005): CIA World Factbook: Canada. Washington, D.C.: U.S. Government Publishing.

Fortin, Pierre. (1995). The Canadian Fiscal Problem: The Macroeconomic Connection. Atlantic Economic Journal.

Howlett, Michael and M. Ramesh. (1992). Political Economy of Canada: An Introduction. Toronto: McClelland and Steward.

Longworth, David. (2007). Canadian Monetary Policy.


Cite this Document:

"Canadian Economy In Recent Years " (2007, November 28) Retrieved September 21, 2021, from
https://www.paperdue.com/essay/canadian-economy-in-recent-years-33906

"Canadian Economy In Recent Years " 28 November 2007. Web.21 September. 2021. <
https://www.paperdue.com/essay/canadian-economy-in-recent-years-33906>

"Canadian Economy In Recent Years ", 28 November 2007, Accessed.21 September. 2021,
https://www.paperdue.com/essay/canadian-economy-in-recent-years-33906

Purpose of Paperdue.com

The documents we provide are to be used as a sample, template, outline, guideline in helping you write your own paper, not to be used for academic credit. All users must abide by our "Student Honor Code" or you will be restricted access to our website.

Related Documents
Economic Challenges Canada Faces in Recent Years,
Words: 2957 Length: 10 Pages Topic: Economics Paper #: 67866735

Economic Challenges Canada Faces In recent years, the challenging economic condition in Canada has emerged as a concern for citizens, policy makers and the government alike. Canada faces challenges in terms of creating a more innovative society, as the country continues to experience a significant productivity gap compared to other advanced industrial economies. The Canadian industry appears to be slower in successfully developing, applying and marketing innovative products, processes and services

Canadian Red Wine This Is
Words: 5946 Length: 20 Pages Topic: Agriculture Paper #: 36141299

In 2002/2003 alone, sale of Canadian red wine increased by more than 15% over previous years ("Wineries in Canada" para. 2). In the domestic Canadian market, Canadian consumers have been drawn to Canadian coolers, but domestic beer and wine have been losing ground to imports, with imported beer and wine products posting an average growth rate of 15.5% and 10.4%, respectively, over the last five years. Red wine has countered

Canadian Current Events Magazine Produced by Name
Words: 2428 Length: 7 Pages Topic: Economics Paper #: 71833092

Canadian Current Events Magazine Produced by NAME Career Prospects This article describes the growing trend in the corporate world of eliminating performance reviews, which many find to be ineffective and even counterproductive. The article notes that workers and managers alike often feel that performance reviews do not measure what they are meant to measure, and that they fail to provide Continued on New Mining Activity in Alberta Career Prospects Letters to the Editor Interview with Financial Expert Sports

Canadian Perspectives of Capitalism As
Words: 1932 Length: 6 Pages Topic: Economics Paper #: 23279868

One of the failures of the current system is that it often does not account for cultural and resource differences between nations - instead a one-size fits all economic system is imposed universally. Over time, each society will find its own path. Some societies will fail to adapt and ultimately disappear. That is part of the evolutionary process. The key is that right now all societies are not given

Canadian Policy at the Crossroads:
Words: 2257 Length: 8 Pages Topic: Government Paper #: 6021192

Largely, this sense of solidarity with the U.S. And a Western Bloc translated into practical reality in the Cold War and has lasted into the present period of the War on Terrorism. This has however not been without exception. During the Reagan years, Canadians were not as much onboard with the pro-U.S. line as leaders such as Britain's Margaret Thatcher. However, doubts such as have been entertained above have had

Canadian Food Safety: A Wider
Words: 3763 Length: 10 Pages Topic: Agriculture Paper #: 37167022

Holley's (Chase, 2010) on grounds of dereliction of duty. If the State 'got paid' the same regardless of how many violations it prosecuted, that second dimension of moral hazard would overlap the primary incentive for producers to cheat. Adverse selection is often considered a result, rather than a cause of moral hazard, where offering a risk-bearing product creates incentive for demand by the riskiest consumers. Obvious modern examples include offering