The Bank of Canada hiked its overnight interest rate by a full percentage point earlier this summer — a move so large and so swift that it would have been unimaginable not too long ago.
This week on Down to Business, Jean-Paul Lam, a professor in the University of Waterloo’s Dept of Economics and a former assistant chief economist at the Bank of Canada, talks about interest rates and inflation.
Lam said he thinks the aggressive tightening of interest rates in Canada, the U.S. and elsewhere is a sign that central banks fell behind the curve and missed crucial signals about the economy.
But if true, where does that leave us? When will inflation die down, especially when some of the longer-term causes, such as the pandemic, persist? We addressed these and other questions.
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