The Financial Post reports in its Tuesday edition that in their pandemic-recovery plans, global policy-makers are emphasizing not only growth and income but also how the fruits of the recovery are distributed and whether some people are being left behind. A Bloomberg dispatch to the Post reports that Bank of Canada Governor Tiff Macklem frequently uses the terms "complete recovery" and "shared recovery." In practice, that means trying to run the economy as hot as possible without fuelling inflation too much.
Bloomberg says the issue becomes more acute if a commodity boom heats up the economy but exacerbates disparities. The BOC sees an inflation spike and any prolonged surge in demand for commodities as largely temporary.
"I don't think of it as a true commodity supercycle," said Stephen Poloz, Mr. Macklem's predecessor as BOC governor, in an interview, referring to economic cycles in which prices remain well above long-term trends for years. He said, "I'm not predicting the roaring '20s here -- rather a good, solid resumption, and if it's well managed it will be long lasting."
Even if there is no supercycle, the run-up will produce windfalls for the Canadian economy as long as prices do not decline.
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