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Canadian Policy Debates and Case Studies in Honour of David Laidler

Author(s):Leeson, Robert
Reviewer(s):Emery, Herb

Published by EH.NET (April 2011)

Robert Leeson, editor, Canadian Policy Debates and Case Studies in Honour of David Laidler. New York: Palgrave Macmillan, 2010. xiii + 234 pp. $100 (hardcover), ISBN: 978-0-230-23734-6.

Reviewed for EH.Net by Herb Emery, Department of Economics, University of Calgary.

This Festschrift volume honoring David Laidler presents a collection of papers by prominent economists and policy analysts focused primarily on Canadian policy issues.? David Laidler is one of Canada?s most influential monetary economists. As noted throughout the volume, Laidler?s academic publications and policy commentaries influenced decisions and operations of the Bank of Canada, most notably the Bank?s adoption of inflation targeting in the early 1990s, and other areas of governance in Canada.? Reading the volume, it is difficult to not be impressed by the fact that two previous Bank of Canada Governors (Gordon Thiessen and David Dodge) pay tribute to Laidler in the Preface to the volume and a third, John Crow, provides a discussion of a chapter in which he provides praise of the highest order when he states that ?David is also a bit of an economic historian.?

This volume is not a history book but instead an example of the utility of history for informing policy making and perhaps a reminder to reconsider what we consider history. In her chapter ?The Lender of Last Resort: Lessons from Canadian History,? Angela Redish summarizes David Laidler?s career as ?insightfully combining the history of monetary thought with a hands-on approach to monetary policy? (p. 80).? In his chapter, ?Inflation Targeting in Canada,? Peter Howitt highlights Laidler?s belief that to understand macroeconomic performance involves understanding the role of money in the adjustment mechanisms and behavioral rules of a modern economy which ?evolved differently across time and space depending on particular historical circumstances? (p. 42).? It is notable that an accomplished macroeconomist like Howitt identifies this part of Laidler?s work as something that distinguishes him from mainstream macroeconomists.? Economics as a discipline has become largely ahistorical often counting information from the pre-2000 era of limited use or interest unless it aids as an identification strategy in an econometric model. The Laidler tribute volume is a reminder that this orientation of economists away from history is not consistent with the intellectual approach of earlier generations of great and influential economists for policy such as Maynard Keynes, Milton Friedman and John Kenneth Galbraith.?

Angela Redish?s chapter, ?The Lender of Last Resort,? is the only chapter in the volume which is clearly ?economic history.?? While the chapter is motivated as building on some of Laidler?s more theoretical work on lenders of last resort, Redish?s chapter is an excellent overview of the evolution of Canada?s banking sector and its comparison to that of the United States.? This chapter provides an accessible overview that would be an outstanding addition to reading lists for courses in Economic History or Monetary Economics.? Several other chapters are not historical studies but historical context is prominent in the material. Bill Robson in ?The Canadian Monetary Order: Past, Present, and Prospects,? provides an overview of monetary policy in Canada since World War II as part of making his case that the adoption of inflation targets for monetary policy in the 1990s has brought Canada close to having an ideal monetary order.? John Whalley describes Canadian trade policy since Confederation in his chapter, ?Canadian Policy and the Economic Revolution in Asia,? to help the reader understand how Canada?s trade interests and trade policies may change with the high rates of growth in many of Asia?s national economies.? The chapters on Canadian Medicare by Ake Blomqvist and tax incentives for owner occupied housing by Finn Poschmann consider historical context as well, but over a shorter time period.

Another feature of the chapters in this volume that historians will appreciate is the comparative aspect of the discussions.? Redish and Poschmann consider Canadian policies and institutions in comparison to the United States, while Blomqvist discusses options for reforming Canada?s health care system using experiences from the U.S., UK, Australia, Sweden and other European nations.? Goodhart?s chapter on the political economy of inflation targets looks at the experiences of New Zealand, the UK and Canada.? Clark Leith investigates whether Laidler?s work on the desirability of Canada entering into a North America Monetary Union has lessons for informing Botswana?s policy options around joining a monetary union of southern Africa countries.

I am often asked by colleagues in other countries for recommended sources describing Canadian institutions and policy.? This volume is one that I will add to my list of recommended sources given the high scholarly caliber of the chapter contributors and the accessible and highly readable discussion of a wide range of macroeconomic policy topics.? Perhaps the highest praise I can give a volume paying tribute to an economist is that this volume is an efficient way to learn about Canadian policy issues.

Herb Emery is the Svare Professor in Health Economics at the University of Calgary and Managing Editor of Canadian Public Policy/Analyse de Politiques.? He recently published “?Un-American? or Unnecessary? America’s Rejection of Compulsory Government Health Insurance in the Progressive Era,” Explorations in Economic History 47 (1) (2010): 68-81.

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Subject(s):Economic Planning and Policy
Financial Markets, Financial Institutions, and Monetary History
History of Economic Thought; Methodology
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII