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  • Community Economic Development in Manitoba - a new film January 16, 2018
    Cinameteque, Jan 23.  7:00 pm - Free event Film Trailer CCEDNET-MB, CCPA-MB, The Manitoba Research Alliance and Rebel Sky Media presents: The Inclusive Economy:  Stories of Community Economic Development in Manitoba
    Canadian Centre for Policy Alternatives
  • Winnipeg's State of the Inner City 2018 January 3, 2018
    Winnipeg's community-based organizations are standing on shakey ground and confused about how to proceed with current provincial governement measurements.  Read the 2018 State of the Inner City Report.
    Canadian Centre for Policy Alternatives
  • Our Schools/Our Selves: Winter 2018 is online now! December 18, 2017
    For the first time, this winter we are making Our Schools/Our Selves available in its entirety online. This issue of Our Schools/Our Selves focuses on a number of key issues that education workers, parents, students, and public education advocates are confronting in schools and communities, and offers on-the-ground commentary and analysis of what needs to […]
    Canadian Centre for Policy Alternatives
  • Charting a path to $15/hour for all BC workers November 22, 2017
    In our submission to the BC Fair Wages Commission, the CCPA-BC highlighted the urgency for British Columbia to adopt a $15 minimum wage by March 2019. Read the submission. BC’s current minimum wage is a poverty-level wage. Low-wage workers need a significant boost to their income and they have been waiting a long time. Over 400,000 […]
    Canadian Centre for Policy Alternatives
  • CCPA-BC joins community, First Nation, environmental groups in call for public inquiry into fracking November 5, 2017
    Today the CCPA's BC Office joined with 16 other community, First Nation and environmental organizations to call for a full public inquiry into fracking in Britsh Columbia. The call on the new BC government is to broaden a promise first made by the NDP during the lead-up to the spring provincial election, and comes on […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

Prices Decline Yet Again

Statistics Canada reported today that, for a third consecutive month, consumer prices declined and the inflation rate fell below 2%. In July, the inflation rate was 1.3% and the Bank of Canada’s core rate was 1.7%.

Gasoline and natural gas prices, which have been lower this summer than last, dragged down the overall Consumer Price Index. However, there is little indication of inflationary pressure anywhere.

Even those categories with the largest price increases were in line with the Bank of Canada’s 2% target. Food prices and household expenses rose 2.1% over the past year. The inflation rate for services was 2%.

With inflation subdued, there is no pressure for the central bank to raise interest rates. Indeed, the Bank of Canada could intervene to bring the overvalued exchange rate down to more competitive levels
without stoking significant inflation.

Low interest rates and low inflation create an ideal environment for public investment. Governments can finance long-term infrastructure spending very cheaply. Such investment would contribute to economic growth and employment without imposing discernable cost pressure on the wider economy.

UPDATE (August 18): Quoted in today’s Toronto Star (page B5), Montreal Gazette (page C3), Waterloo Region Record (page D2), Victoria Times Colonist (page B5), Regina Leader-Post (page B1), Guelph Mercury (page B7), Cape Breton Post (page A9) and Truro Daily News (page A7).

Enjoy and share:

Comments

Comment from Angella MacEwen
Time: August 17, 2012, 12:06 pm

Public infrastructure spending that pays for itself in the medium term & improves private sector productivity? Affordable, accessible, quality childcare. Let’s do that.

Comment from Larry Kazdan
Time: August 17, 2012, 1:04 pm

Modern Monetary Theory – Bill Mitchell

“government spending is independent of borrowing, with the latter best thought of as coming after spending”

http://modernmoney.wordpress.com/tag/deficit-spending-101/

Comment from Thomas Bergbusch
Time: August 17, 2012, 10:07 pm

@Larry Kazdan:

Good point, but Erin wrote “Governments (plural) can finance long-term infrastructure spending very cheaply.” Clearly he talking about provincial, territorial and municipal governments as well, not just the currency issuer.

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