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Nick, you appear to believe that a sub-1% prime rate is desireable, rather than a sign that the economy is underperforming. When it has been at that level for years, it seems to me that the signal it sends is more in the nature of sirens and flashing red lights. The equanimity with which you view that fact is troubling. Beyond that, as one commenter noted, a sub-1% prime rate leaves the Bank of Canada with diminished capacity to respond to the next recession. Among the things that Mr. Harper can be rightly criticized for is requiring the Bank of Canada to shoulder most of the burden of assisting the economy recover from the 2008 crisis. Its low interest rate policy - it has no other weapon, after all - has fueled a housing bubble that can only end in tragedy.
Keynes just left Canada
Paul Kugman's post title is "Keynes comes to Canada". Paul is wrong. Keynes was in Canada, but he just left. Look at this graph from Matthew Klein (a very good article, by the way): The other bit of information you need to know is that the Bank of Canada hit the Zero Lower Bound in April 2009,...
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