DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post

**kesFockplek** · 06-01-2007, 09:03 PM

Originally posted by KrazyHorse
I find it very odd that the US economy has displayed more volatility than the the Canadian economy over the past decade or so. Usually you would assume that a small country dependent on exports and resource prices would be more volatile. The US is far more volatile than Europe also. My (somewhat speculative) explanation is that this is due to the relatively sluggish rate moves of the ECB. You may not accept that rate moves itself can be cause of volatility, but consider that a rigid ECB policy is pretty much a given because it tends to decide by consensus. Greenspans' policy has tended to be reactive rather than anticipatory. It also was asymmetric, lowering rates far quicker in the face of a downturn, than raising them in the face of an upturn. In any case, the explanation may lie with the US rather than Canada.

06-01-2007, 09:03 PM	#10
kesFockplek Join Date Oct 2005 Posts 642 Senior Member	Originally posted by KrazyHorse I find it very odd that the US economy has displayed more volatility than the the Canadian economy over the past decade or so. Usually you would assume that a small country dependent on exports and resource prices would be more volatile. The US is far more volatile than Europe also. My (somewhat speculative) explanation is that this is due to the relatively sluggish rate moves of the ECB. You may not accept that rate moves itself can be cause of volatility, but consider that a rigid ECB policy is pretty much a given because it tends to decide by consensus. Greenspans' policy has tended to be reactive rather than anticipatory. It also was asymmetric, lowering rates far quicker in the face of a downturn, than raising them in the face of an upturn. In any case, the explanation may lie with the US rather than Canada.
	Quote