Finance committee  Very quickly, in terms of the amount of stimulus provided, the overnight rate went down to 0.25%, functionally the floor for nominal interest rates. Then the Bank of Canada could have embarked on quantitative easing to inject more, but quite frankly I think we could have a debate

Finance committee  Right, because actually the objective is to get to 2% inflation over the medium term, not a given year, so there was the ability to respond through the flexibility of the system. Also, I do question this issue around the better ability of the Bank of Canada to respond to the en

Finance committee  --some sort of measure of core nominal GDP to eliminate the temporary impact of higher energy prices on nominal GDP targeting. I guess we could come up with something like that, but that's one of the reasons why the Bank of Canada uses the core CPI as the--

Finance committee  I guess it comes back to what the impact of even easier monetary policy than what we currently have would be. We already have an extraordinarily stimulative monetary policy. It could help to bolster economic growth to some extent, but I think the down side of it is that we would

Finance committee  Very quickly, I just addressed the question about what we should be doing about debt. I think you have to set interest rates for the entire economy. If you have concerns about debt, they're not going to be on corporate debt. The issue is going to be around consumer debt. When w

Finance committee  --I think one of the core issues we have right now is that there is every reason, every incentive, for businesses to invest and expand; the problem is confidence. The lack of confidence relates to the external environment we're operating in, with worries about a European banking

Finance committee  Just very quickly--

Finance committee  That's a very broad observation. Let me just start with 0% as the ideal target. It might be the ideal target, but the problem is inflation fluctuates, and that would mean you would be spending part of your time with deflation, and deflation is extremely corrosive, because--

Finance committee  If we had a perfect theoretical world where we had complete stability, then you could have inflation running at 0%. But in the practical world that exists today, you can't target 0% because of the damage that you could create by creating deflation. That was why I was saying that

Finance committee  Part of the problem is the language we use. And unfortunately, in this context we're talking about things like full employment, NAIRU. Really what we're trying to talk about is trying to create price stability that creates an environment of economic growth that then creates a bet

Finance committee  I have two points. One, on the full employment side, we don't know where full employment is. We know there is always going to be transitional unemployment. Just as anecdotal evidence, when Alberta saw its unemployment rate get down to 4%, when Calgary was in the 3% to 4% range, y

Finance committee  Right. So you could see that full employment isn't zero. Let's be very clear. We don't actually know where it could be. Maybe it's not 6% to 8%; maybe it's 5% to something else. There is another thing I would point out in terms of the conduct of the Bank of Canada's monetary pol

Finance committee  As I said, I believe that fiscal and monetary policy both contributed to limiting how deep the recession became.

Finance committee  As I said, I think the best example of that was the decision to make a conditional commitment to keep interest rates low for an extended period of time with an actual specific date associated with it. We'd never had that happen before, and it did have a material impact on the thi

Finance committee  When we think about how monetary policy responded to the financial shock of 2008, we need to understand that there was actually nothing structurally wrong with the Canadian economy before the financial crisis hit. What effectively happened to Canada was that we were hit with a ma