david dodge : canada ’ s experiences of the past few decades speech by mr david dodge, governor of the bank of canada, to the spruce meadows roundtable, spruce meadows, alberta, 5 september 2003. * * * thanks to my colleagues from around the world for giving such a comprehensive review of the vital issues facing the global economy. one of the hazards of speaking last in these kinds of sessions is that those who speak before you may cover all the interesting territory, leaving you with the unenviable task of trying to tie everything together. in this case, however, going last is not so bad. that ’ s because, in order to tie together the issues discussed so far, we need to take a global view of the economy. and as far as canada is concerned, taking a global view has always been important. of course, every country is affected to some extent by what happens in the world economy. but canada, with its very open economy, has a particular need to keep an eye on the changing fortunes of the international scene. canada ’ s reliance on foreign trade has required us to be active internationalists for decades. louis rasminsky, who went on to become governor of the bank of canada, was one of canada ’ s delegates at the bretton woods conference that led to the creation of the international monetary fund ( imf ) and the world bank. rasminsky played an important role, formal and informal, at the talks. not only was he the chair of the drafting committee, he was also the peacemaker between the british delegation, led by john maynard keynes, and the u. s. delegation, led by treasury secretary harry dexter white. in the months leading up to bretton woods, it was rasminsky who kept the two key delegations talking. without his work, both as a skilled drafter and as a go - between, it ’ s entirely possible that the talks at bretton woods could have ended in failure. canada was also present at the 1947 havana conference, where we pushed for the establishment of an international trade organization. this was meant to be a body parallel to the imf, designed to establish and monitor a set of global trade rules. we didn ’ t get quite what we wanted, but the result was still certainly positive : the birth of the general agreement on tariffs and trade ( gatt ). in 1995, nearly five decades later, we were more successful, as we pushed the effort to turn the gatt into

mark carney : some considerations on using monetary policy to stabilize economic activity remarks by mr mark carney, governor of the bank of canada, to a symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyoming, 22 august 2009. * * * it is an honour to provide a few comments on carl walsh ’ s excellent paper, which revisits some fundamental monetary policy issues. walsh ’ s paper highlights many useful lessons that can be learned from the conventional framework and its various extensions. however, the financial crisis provides a stark and costly reminder of just how incomplete the standard model is. i will concentrate on the future of monetary policy in light of both the lessons of the crisis and the prospect of some central banks having more formal responsibility to promote financial stability. i will take as my starting point walsh ’ s observation that : “ distortions in financial markets that generate real effects of monetary policy also imply that financial stability may require making trade - offs with the goals of inflation stability and stability of real economic activity. ” 1 there is an emerging consensus that price stability does not guarantee financial stability and is, in fact, often associated with excess credit growth and emerging asset bubbles. 2 there is also general agreement that the first line of defence should be better regulation, including new macroprudential tools. however, it is less widely recognized that this will mean it is not “ business as usual ” for monetary policy. at a minimum, the regulatory response will change the transmission mechanism and, consequently, the implementation of monetary policy. a more fundamental policy question – one that has not yet been fully thought through – is whether the policy rate itself should lean into the wind for financial stability purposes. if so, how will central banks retain accountability and credibility, and their associated benefits for inflation expectations? could it be advantageous to amend the price stability mandate? i would like to undertake an initial exploration of these issues today. what follows is a discussion of ideas worthy of consideration. it should not be seen as having any bearing on the current conduct of monetary policy or the prospective management of financial stability in canada. the bank of canada's current inflation - control agreement with the government of canada will remain in effect until the end of 2011. any changes to our agreement with the government, if desired by both parties, would only come into effect thereafter. changes to financial stability regulation are generally the purview of the government of canada. is price stability enough? while most central banks have added a financial stability