The evolution of Canadian economic goals


Economic priorities over the years
Years: '45-'75 '75-'92 '92-'99
School: Keynesianism Monetarism Supply side
1 Unemployment Inflation Economic freedom
2 Equitable distribution Unemployment Economic freedom
3 Productivity Economic freedom Inflation
4 Inflation Equitable distribution Unemployment
5 Economic freedom Productivity Equitable distribution

Fiscal VS Monetary policy

Type Agent Methods
Fiscal Government Increase gov't spending
Raise taxes
Monetary Bank of canada Increase money supply (Ms)
Raise interest rates

Schools of economic thinking

School Time period Explaination
Classical
(a la Adam Smith)		 -'29
(pre depression)
  • Laissez faire economy.
  • Free markets will correct themselves.
Keynesian '30-'75 Large role for gov't.
Monetarism
(Chicago school of economics)		 '75--> Reverting to classical economics.
Supply side
(aka Reaganomics)		 '80--> Gov't is the problem:
  1. High taxes stifle incentive.
  2. Gov't spending is wasteful.
  3. Too many regulations (unions, min. wage & environmental laws) choking business.
  4. Welfare & other social programs encourage idleness & are a disincentive to work.
Soln: Minimal role for gov't.