Impact of Inflation on the Canadian Economy
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This paper examines the impact of inflation on Canada's economy, with a particular emphasis on the nation's overall monetary policy. First, the paper defines inflation and describes its effects on an economy and individuals. Next, the paper gives an overview of the Canadian economy, further showing its growth in the past few decades. The paper notes that the Canadian economy has been one of the strongest in the world. Then, the issue of inflation is explored, describing how it happened and viewing it as a natural offshoot of the global financial crisis. The paper finally enumerates the Bank of Canada's plan to strengthen the economy and reduce inflation. The paper concludes by stating that Canada's inflation targeting will probably help the nation's economy to recover faster from any setbacks produced by the economic and financial crisis on global level.
From the Paper:"Some of the elements that represent direct effects of high inflation represent wealth redistribution, social convulsions, decreased living standards for certain categories, economic information may lose some of its value, decreased savings and investments, production losses, and increased unemployment rate. Regarding income redistribution, any price modification implies modification of incomes for at least two economic agents, therefore a distribution modification and another income configuration for the economic agents in case (Phelps, 1970).
"In order to better understand the economic impact of inflation, it is necessary to present the current economic situation that characterizes Canada. The country is a high-tech industrial society, with a market-oriented economic system. Over the past few decades, Canada experienced continuous economic growth, becoming one of the most stable and secure economies in the world.
"However, the economic and financial crisis did not leave the Canadian economy untouched. In 2008, Canada's economic growth was significantly slower than before. The most affected sectors are the housing and the auto sector. It is expected that public finances will deteriorate in the following period."
Sample of Sources Used:
- Canada (2009). Central Intelligence Agency. The World Factbook. Retrieved June 11, 2009 from https://www.cia.gov/library/publications/the-world-factbook/geos/CA.html.
- Dodge, David (2002). Bank of Canada. Governor of the Bank of Canada's Speech to the Canadian Society of New York. Retrieved June 11, 2009.
- Ragan, C. (2005). The Exchange Rate and Canadian Inflation Targeting. The Bank of Canada. Retrieved June 11, 2009.
- Phelps, Edmund (1970). Inflation Policy and Unemployment. MacMillan. Retrieved June 11, 2009.
- Preview - Canada March inflation seen weak but steady (2009). Reuters. Retrieved June 11, 2009 from http://www.reuters.com/article/companyNewsAndPR/idUSN1549816720090415.
Cite this Analytical Essay:
Impact of Inflation on the Canadian Economy (2011, November 16) Retrieved May 27, 2020, from https://www.academon.com/analytical-essay/impact-of-inflation-on-the-canadian-economy-148957/
"Impact of Inflation on the Canadian Economy" 16 November 2011. Web. 27 May. 2020. <https://www.academon.com/analytical-essay/impact-of-inflation-on-the-canadian-economy-148957/>