Thank you, Chair.
Welcome, Governor. I appreciate your attendance.
I'll take you to some macroeconomic questions that flow out of your written remarks this morning. In your written remarks, you talk about the recession causing “a significant structural change” to our economy in talking about our country's “productive capacity” dropping. As the bank noted, in 2009 that occurred, but then you say, “Standard macroeconomic models don't really capture these dynamics.” You say then that “the financial crisis triggered an atypical recession” with an “unusual” recovery, in your words.
Then you go on to talk about a positive prediction about where our economy will go, with foreign demand recovering, increased capacity, and expanding companies and the like. However, the OECD recently reduced the estimates for Canadian economic growth. In November, it was projecting 1.8% growth for this year. It has now downgraded that to 1.4%. The OECD also reduced their prediction for growth in 2014 from 2.4% to 2.3%.
I guess my question is, given what you call the inability of “standard macroeconomic models” to capture these dynamics, how can we be confident in the predictions that you've just made this morning?