Paper Summary:

This paper explores the relationship between the U.S. venture capitol arriving in Canada every year as a way to prove that the rising Canadian interest rates lured American investors in lending to Canada. The paper discusses how although the United States and Canada have always shared a close economic relationship, integration into the U.S. economy through higher U.S. investments in the Canadian market mark a rise in prime interest rates as determine by the Bank of Canada. The paper explains that what results is further proof that rising interest rates signal a surplus of foreign investment. the paper relates that with this knowledge, the Bank of Canada lowered prime rates in its attempt to curb the inflation that naturally comes with such a surplus of foreign capitol. The paper notes that remaining questions linger about future investments after the 2008 rate decrease.

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