This article is a transcript of an interview was conducted by , a project of the Centre for Civic Engagement and Hub Canada Media. Listen to the interview .听
SEAN SPEER: Welcome to Hub Dialogues. I鈥檓 your host, Sean Speer, editor-at-large at The Hub. I鈥檓 honored to be joined by Chris Ragan, the founding director of the Max Bell School of Public Policy at 平特五不中. Chris is the author of one of the most widely used introductory economics textbooks in Canada. He鈥檚 a brilliant macroeconomist who has published dozens of books and articles and advises governments on a range of topics including public finance, carbon taxes, and monetary policy. I鈥檓 grateful to be able to speak with him about fiscal and monetary policy in general, and the growing salience of Modern Monetary Theory in particular.听聽
Chris, let鈥檚 start by contextualizing our conversation with how we鈥檝e tended to think about fiscal and monetary policy over the past quarter-century or longer. Broadly speaking, how would you describe the conventional wisdom with respect to deficits and debt on one hand, and the interrelationship between fiscal and monetary policy, on the other hand?聽聽
CHRIS RAGAN: The conventional view is that fiscal policy is really about two things. One is that you come up with a way to raise the revenues you need to finance all the spending that you do. And there鈥檚 a huge amount that goes into that. There鈥檚 a huge amount that goes into what you decide public spending will be on and what it won鈥檛 be on, and there鈥檚 a huge amount that goes into how we figure out how we want to raise the tax revenue required for that. That鈥檚 one big bundle of things.听聽
The second big bundle of things with fiscal policy is the extent to which聽you want to use Keynesian-style fiscal stimulus when you are confronted with a weakening economy or a slumping economy. And I think there has existed for many years a fair amount of agreement that fiscal stimulus is a potentially very important tool. You probably don鈥檛 want to respond to every bump and wiggle in the economy, but you can certainly respond with well-designed fiscal stimulus packages to big shocks, like we saw in the 2008-2009 financial crisis. That鈥檚 a very good example. So, to me, that鈥檚 all fiscal policy. And notice, nowhere in there did I mention the central bank, nor did I mention inflation. Part of this conventional wisdom has been the division of duties.听聽
All of those things that I just talked about were kind of left to fiscal policy, and the corollary is that the central bank would focus its attention on stabilizing the economy. So there, they overlap with the Keynesian fiscal stimulus, but they would be really keeping their eye on inflation. And they would be directing their very limited number of policy instruments, which is really the central bank鈥檚 balance sheet, to controlling inflation. And we can talk a little bit more about what is involved in the control of inflation. But really, there has been this division of duties with taxes and spending and deficits on one side鈥攄eficits or surpluses, I should say鈥攁nd with monetary policy and inflation on the other side.听聽
The one final thing I will say in that is that, in this conventional thinking, there has been the belief in what is sometimes referred to as monetary dominance: the idea that if the fiscal authorities end up spending a lot or cutting their spending or adjusting their taxes, it, of course has an effect on the aggregate economy. It may, in fact, have an effect on the amount of aggregate demand or deficient demand in the economy, and that may have implications for inflation, but if the central bank is doing its job, then it can sort of counteract some of the negative inflationary aspects that come from that fiscal policy. So the fiscal authority wouldn鈥檛 have to worry about that. Securing the knowledge at the central bank sort of had that covered. So, that is my long-winded way of characterizing that division of duties between fiscal and monetary policy.听
SEAN SPEER: How much is the renewed interest in deficit spending driven by a basic political economy challenge? Let me put this proposition to you. On one hand, the public seems to want more government spending, but, on the other hand, it doesn鈥檛 seem prepared to fully pay for it. An empirical way to make this point may be that public spending as a share of GDP is up, but revenue as a share to GDP is generally flat. Is that a sign that Canadians and others in advanced economies want big government on the cheap? If so, are deficits an imperfect way to solve for this dissonance in our political preferences?聽
CHRIS RAGAN: Okay, I would say there were two questions there. So, one invites a little bit of history, and the other is about our current belief in getting something for nothing. Just to start with where you ended, I actually think there is a lot behind what you just said; I think there鈥檚 a belief that you can get a bunch of a government on the cheap. 鈥淲hy raise taxes, if you can just put it on the credit card?鈥� But I鈥檒l come back to that.听
I want to start by talking a little bit about the history. I won鈥檛 go back that far; I鈥檒l go back to the mid 1990s. When the federal Canadian government had a 68 percent debt-to-GDP ratio, the aggregate provincial debt-to-GDP ratio was about 22 percent. So, the combined federal-provincial debt ratio was about 90 percent of GDP. This is when we thought as a country that we had hit the 鈥渄ebt wall,鈥� and some bad things happened in financial markets.听聽
I think there was a general belief that maybe Canada wouldn鈥檛 be able to pay back its debt, or at least there were some questions raised about the extent to which that would be possible. Both provincially and federally, we embarked on a pretty serious fiscal consolidation over the next few years. And even though for 15 years, there were many people from the 1980s and early 1990s that had talked about the dangers of high government debt, the rubber didn鈥檛 really hit the road on this issue until the early- to mid-1990s, and then we embarked on this fiscal consolidation.听聽
So of course, under Paul Martin鈥攚ho was the finance minister at the time鈥攁nd Jean Chr茅tien鈥攚ho was prime minister, we brought very large fiscal deficits into pretty substantial fiscal surpluses in a fairly short amount of time; pretty quickly the debt-to-GDP ratio was falling. And as you know, by the time we got to 2008, just before the financial crisis, our federal debt to GDP ratio was just about 30 percent鈥攑lus or minus a very small amount. That was quite a change.听
And what was interesting politically, before the financial crisis happened, is that we had come to the point in this country where even the NDP in the mid 2000s were agreeing that high public debt really is a problem, we really should be very careful about budget deficits, and we should actually be balancing the budgets. The political convergence on that point was actually quite shocking. One can argue whether it was good or bad, but it was quite surprising.听聽
Then the financial crisis happened, and it took a while, but鈥擲tephen Harper was prime minister and Jim Flaherty was the finance minister鈥攊t took a while for them to believe that there would be a recession, and it took a while for them to really believe that we needed some sort of Keynesian fiscal stimulus. But the G20 countries got together in the fall of 2008, and they all agreed to go back home to their national capitals and to embark on a sizable two-year fiscal stimulus package. We did, other countries in the G20 did, and I think it was a very good thing that we did. I mean, given the nature of the financial crisis, given the nature of the collapse in aggregate demand and the massive uncertainty, I think a big fiscal stimulus鈥攁nd over those two years that amounted to something like five or six percent of GDP鈥攖he fiscal stimulus was relatively well-designed, and I think it was well motivated. And at that point, of course, there wasn鈥檛 a huge amount of political opposition to that fiscal stimulus.听
So now, what had just two years or a year before been a unanimous political view that we should be balancing budgets had become a view that a fiscal deficit was okay. But of course, the deficits lasted only for a few years; the debt-to-GDP ratio increased and then sort of came back down again. And by the time we got to just before the pandemic, our debt-to-GDP ratio federally was again back down to something like 30 or 31 percent. It was pretty low. I mean, maybe I鈥檓 off by a percentage point, but nothing serious. And then, of course, we were confronted by the pandemic. The pandemic is not only a huge shock, but it鈥檚 a very, very different economic shock than we experienced in the financial crisis of 2008-9.听聽
And so, what we embarked on was massive deficit spending, but not stimulus spending. And I think that鈥檚 a really important distinction: The federal government鈥擩ustin Trudeau has been saying now for the last two years that 鈥淲e have your back.鈥� What he meant by that, or my fiscal interpretation of what he meant by that, was, 鈥淲e will make sure that the financial relief is there for you, for households for small businesses, even for some large businesses, while your income has basically disappeared because of the requirement that people stay at home and isolate safely, and you know while your income generating ability has disappeared, we will provide the financial relief.鈥澛�
That has not been stimulus spending in the usual way; it鈥檚 not designed to increase aggregate demand, it鈥檚 really designed to allow you to pay your mortgage and to buy groceries, etc. And of course, those last two years, our deficits have gone literally off the charts, off most charts, and that鈥檚 been true in most advanced countries. Though, if Omicron is the last wave, then the budget deficits will eventually get back down to something closer to zero; the debt-to-GDP ratio will come on down, and you saw in the Fiscal Update that there is a path鈥攈opefully it will happen鈥攖hat has that debt-to-GDP ratio coming back down slowly. It鈥檒l be a long time before it gets back to the low-30s, but it will get back to the low-40s within several years.听
So, we鈥檙e now in this situation where I think for very, very good reasons, we had very large budget deficits over the past couple of years; there was some relief spending that I think needed to be done, and the government deserves credit for designing those packages. But, and the 鈥渂ut鈥� here comes to your second point,聽is this: Are we now in this situation where we think that we can just spend on lots of things and not actually pay for them? We鈥檙e so used to, like in the last 18 to 22 months, we鈥檙e so used to putting things on the charge card, that I actually think there is this growing belief that maybe we can just keep spending, and we don鈥檛 have to raise current taxes to pay for it. And in a world of very low interest rates, it is true that you can put things on the, you know, you can borrow to finance those expenditures, and you are putting the cost onto the future, but you鈥檙e putting a low cost onto the future, because those interest rates are so small.听聽
And one of my concerns is that the current finance minister and the current federal government are not talking enough about the future and to what extent should we be rethinking government spending priorities鈥攖o what extent should we be hastening the decline in the debt-to-GDP ratio. Because there will be another recession of some sort. There will be either another financial crisis or another pandemic or another something that we can鈥檛 even imagine. There will be a need to lower that debt-to-GDP ratio so that there is fiscal room for the government can respond to the next event, whenever and whatever it is.听聽
But I think my criticism here is that the government is not really thinking enough or talking enough about the need to rethink fiscal priorities; the need to think about possible tax increases; the possibilities of what might happen if interest rates rise. All of that is just not being talked about, in my estimation.听
SEAN SPEER: Well, thank you for that comprehensive answer, Chris, from recent fiscal history to a discussion of the future, which is a good segue to my next question.听
You outlined concerns that the government isn鈥檛 thinking about how to close the gap between its spending ambitions and the revenue it collects. But there are some who would argue that they don鈥檛 need to, which brings us to the conversation that I want to have with you about Modern Monetary Theory. Maybe just to start definitionally, where did it come from? And in the fairest possible terms, what鈥檚 the general proposition behind Modern Monetary Theory?聽
CHRISTOPHER RAGAN: So those questions sound simple, but they鈥檙e not quite so simple. Let me address the first one. Where does it come from? I think some of the ideas about MMT have actually been around for a long time. But it鈥檚 the last 10 or 12 years that we have seen a couple of things happen. We have seen the big financial crisis in 2008-2009 and we鈥檝e seen the pandemic that we鈥檙e living in right now. The policy responses to both of those crises had, number one, large amounts of government spending鈥攎uch larger in the pandemic than in the financial crisis, but a large increase in government spending in both cases. And in both cases, central banks that increase their balance sheets, they increase their amount of large asset purchases through printing of money. So, quantitative easing. Now, that didn鈥檛 happen in Canada in 2008, but it's happening in Canada, during the pandemic, right now. And it happened in the United States and in the Bank of England, and in the European Central Bank, both in the financial crisis and now.听聽
So, I think this confluence of these two things: We鈥檝e got big economic shocks, we鈥檝e got the central bank printing a lot of money and using that freshly printed money to buy government and other bonds. And at the same time, we鈥檝e got government spending a huge amount of money on the fiscal side, and I think that has brought鈥� it鈥檚 come together, and people have said, they鈥檝e kind of dusted off these old ideas that, 鈥淥h, well, maybe we can just print money to finance the government鈥檚 budget deficits. And maybe that鈥檚 not so bad and let鈥檚 wrap that all up, and we鈥檒l call that Modern Monetary Theory.鈥� Okay, so I think that鈥檚 where it has come from, or at least why it鈥檚 been dusted off in the last few years.听聽
What is it at its heart? Well, this is actually tough. I mean, I, last year, I was teaching in the MPP program at Max Bell, and I teach in the macro class, and I wanted to teach a section on monetary policy in theory, but I also wanted to cover off MMT. So, it forced me to go away and read a bunch of literature on MMT. And I was shocked at how hard it was to figure out what it was. Because there are times when you kind of think, 鈥淲ell, hold on, there鈥檚 nothing new here.鈥� And then there are other times when you think, 鈥淲ell, I鈥檓 not sure if there鈥檚 anything at all here.鈥� And then there are times when you read something and you think, 鈥淲ell, I think this is just wrong.鈥澛犅�
And so, here鈥檚 the way I would describe MMT. I think MMT is a belief that if you are a government that has your own central bank, that can create its own currency, then you don鈥檛 have to worry so much about running budget deficits and all of the constraints that ordinarily we would think of as being associated with budget deficits, because you can effectively get your central bank to purchase your bonds, and you own the central bank, so you can get your central bank to print the money required to buy your bonds.听聽
Now, that was always true. Any government that had a central bank could always do that. But the MMT people think, or they seem to think if it鈥檚 my interpretation here, that you not only can do that, but you should do that, and you shouldn鈥檛 require your central bank to worry too much about inflation; you should worry about inflation through adjusting your spending and your taxation. So, it鈥檚 really a way to subsume the central bank into the fiscal authority.听聽
And if you go back to our first question, that sort of division of duties between fiscal policy and monetary policy, my interpretation of MMT is that they have completely stuck these two things together by subsuming the central bank into the fiscal authority, so that the central bank would no longer be operationally independent; it would no longer be focused on inflation. In fact, it would no longer be in the headlines at all, because the fiscal authority would be basically taking charge of the central bank. And you could do that, you absolutely could do that. The question is whether you want to do that. I think this is technically possible. I think the fundamental question is, is this a good way to run policy?聽
SEAN SPEER: Isn鈥檛 it the case, Chris, that we collectively, not just Canada, but dozens of jurisdictions around the world, established an independent monetary policy authority precisely because the evidence over decades was that politics couldn鈥檛 be trusted with managing the question of inflation? So, in effect, wouldn鈥檛 this be a reversion to the politicization of inflation management?聽聽
CHRIS RAGAN: So, I agree with everything that you just said, and I think that is a correct reading of the 1950s, 1960s, and 1970s. I think there was a growing recognition that countries with less independent central banks tended to have higher inflation, and they tended to have higher inflation because the politics got into the mix. And, you know, the government would basically encourage the central bank to goose the economy before an election, so to speak, and you鈥檇 end up with higher inflation as a result. And so, there was a worldwide movement toward more independent central banks, taking the politics out of it to the extent possible. And there was a聽growing recognition as well, Sean, that central banks couldn鈥檛 do everything: that inflation was fundamentally a monetary phenomenon in a sustained way, that bumps and wiggles in inflation may be caused by all kinds of things. But if you really wanted to understand what the long-run effects of monetary policy were, they ended up being largely on inflation.听聽
So, once you鈥檝e concluded that monetary policy can鈥檛 control a lot of things, but it does seem to have a systematic and sustained influence on inflation, then, I鈥檇 like to say it鈥檚 a kind of a hop, skip, and a jump to saying, 鈥淲ell, we should have central banks focus on inflation.鈥� It just took us 50 years to really get to that recognition. We鈥檙e slow learners, I guess. But there has been this absolute recognition that there are benefits to having operationally independent central banks, focused on inflation. Canada was the second country to embark on inflation targeting鈥攁fter New Zealand in 1991鈥攁nd for 30 years, we have been targeting inflation. Inflation has been low and stable and relatively predictable, and therefore the costs associated with high inflation haven鈥檛 been there.听聽
So, I think you鈥檙e quite right. I think the MMTers who want to subsume the central bank into the fiscal authority are effectively saying, 鈥淲e don鈥檛 like an independent central bank; we don鈥檛 want the central bank to focus on inflation. Also, we don鈥檛 like the constraints on a government that are put on in private capital markets about whether people will buy our bonds or not. Why don鈥檛 we just have the central bank buy the government bonds?鈥� And so, I think there really is a stated preference for a policy framework which, for many good reasons, we don鈥檛 use currently. I think MMTers really want to go back to a very different world, and I would argue that it鈥檚 not a good world to be in.听
SEAN SPEER: Your answer reminds me of our from late last year in which you joined me to talk about the pending decision on renewal the Bank of Canada鈥檚 inflation target. Listeners will recall that you made the case then that the Bank of Canada ought to be focused like a laser on its inflation target and not take on other policy responsibilities with respect to inequality, or climate change, or any number of issues that were being discussed in the context of renewing the mandate.听聽
What you just outlined, it seems to me, implies that the central banks are facing pressure on both sides. On one hand, there are those who want to add a host of non-inflation issues to their respective mandates. And on the other hand, you have MMTers, who, in effect, want to strip them of their core mandate and hand it to the fiscal policy authorities. Do you want to maybe just outline your thoughts on what I think you鈥檝e described as a two-front war facing central banks in advanced economies?聽
CHRIS RAGAN: Yeah, I think that鈥檚 exactly right. I鈥檝e been thinking about writing this up, and I guess maybe I should do that one of these days. But I actually do think that central banks are currently finding themselves in a two-front war. The MMTers are effectively saying, 鈥淟et鈥檚 take away the central bank鈥檚 independence, and let鈥檚 take away聽its mandate on inflation.鈥� So, those are people who wish to聽basically strip the central bank of power. And on the other side, there are people who seem to believe that the central bank is capable of not only controlling inflation, but doing much more. And so, let鈥檚 have them deal with reducing income inequality and let鈥檚 have them address climate change. Let鈥檚 have them possibly help on the front of Indigenous reconciliation, and maybe there鈥檚 some other things we could have the central bank do as well.听
It鈥檚 really quite ironic because the MMTers either don鈥檛 believe the central bank should have the power that it does, or maybe it just doesn鈥檛 think maybe it is trusted with the power. But the other people want to get the central bank to do much more than they鈥檙e currently doing. They鈥檙e not trying to get them to switch from inflation to something else; they鈥檙e trying to get them to do inflation and a few other things. And so, maybe as long as that two-front war is going on, maybe the outcome of that two-front war is that we just kind of stay with the status quo. And we go, 鈥淥kay, well, let鈥檚 just leave the central banks to target inflation, and maybe that鈥檚 what we鈥檒l do.鈥� And that would be, in my view, a good outcome, because I do think central banks have been successful in dealing with inflation. And I don鈥檛 think you want to combine the central bank with the fiscal authority, because effectively you鈥檙e giving up a policy instrument, which I think is a bad idea.听聽
But at the same time, I also think there are serious limitations on what central banks can do, and I think it would be a big, big mistake to expand their mandate to climate change or income inequality or other things. So, that maybe just makes me sound like an old conservative guy, and maybe I鈥檓 just an old conservative guy, but I think that central banks should actually stick to their knitting. And they鈥檝e actually, I think, shown that they can stick to their knitting, and they can do very well.听聽
Now, some people might say, 鈥淏ut, but we haven鈥檛 had great economic outcomes. We鈥檝e had a financial crisis; we鈥檝e had a pandemic.鈥� And I would say, 鈥淲ell, that may be true that we have not had all the great economic outcomes we鈥檇 had like, but I don鈥檛 think most of that can be laid at the door of monetary policy.鈥� I think monetary policy has done quite a good job in Canada and in other countries in keeping inflation low and stable. And I happen to share the view based on lots of evidence and theory over many years in many countries, that that is all central banks are actually able to do. I don鈥檛 ask that much of my central bank, and I鈥檓 happy when all they do is deliver low and stable inflation.听聽
SEAN SPEER: Well, let鈥檚 just wrap up Chris with a couple of final questions that speak to the motivations behind of Modern Monetary Theory and its likely influence.听
I mean, at some level, it seems to me, these are people whose preferences are for a more ambitious role for government that would necessitate higher levels of spending, but who seem to be making the political economy assumption that the higher levels of taxation necessary to carry out their programme is politically unpalatable. And so MMT has become something of an alternative to the higher rates of taxation that would be required.听聽
But what if a politician or political party made a straightforward argument that spending and taxes should rise as a share of GDP in the name of fully funding an expansion of the welfare state or some other public purpose? Is that okay? Are there empirical limits on the optimal size of government?聽
CHRIS RAGAN: This is a fabulous question, Sean, and it鈥檚 not the easy one. This is the 64-gazillion dollar question. It鈥檚 how big do you want government to be? And I think you can have a very healthy, very interesting debate and disagreement about how big government should be.听
There鈥檚 no right answer to this. So, if you look at the scale of government in the Scandinavian countries, it is larger as a share of the economy than it is in sort of Western European countries. And in Western European countries, it鈥檚 higher than it is in Canada, which in turn is higher than it is in the United States. I mean, that鈥檚 there is quite a range; a range of something like 15 percentage points of GDP between the big government countries and the smaller government countries.听聽
You could have a discussion about whether one of those is better than the other, but they鈥檙e different. They鈥檙e different people who, through democratic processes, have chosen different things. It鈥檚 not necessarily better that Scandinavians have decided to have a more generous social safety net, and Americans have decided to have a less generous social safety. I mean, I might have that view, but other people could have a completely legitimate disagreement with that.听聽
However, while you see larger government spending in the Scandinavian countries, you also typically see more taxation. Scandinavian countries aren鈥檛 just spending a lot but not paying for it. And to me, that鈥檚 the key point: If you want to be a country that has a generous set of social programs, that鈥檚 fine. But I would say you need to pay for it. And if you want to be a country that has a much less generous set of social programs, and you have less government spending as a result, that鈥檚 fine too. Then presumably you have lower taxes to pay.听
What I think is the dangerous combination here is to say, 鈥淟et鈥檚 have really generous social programs, and let鈥檚 not pay for it with taxes, and then we鈥檒l put it on the charge card. We鈥檒l just borrow, and we will run deficits, and that will accumulate into the government debt.鈥� And then one day, you might just wake up, and you鈥檙e like Greece in 2011. Or even like Italy today. There are problems with high government debt. I think there are also problems, by the way, with high government spending and high taxation. But those you tend to experience as they鈥檙e in place.听
So, if governments are going to spend 50 percent of GDP, and then they鈥檙e going to have to raise that through taxation, they are then going to start to have really high marginal tax rates. You鈥檒l start to encounter problems gradually as you鈥檙e adjusting those policies. But if you鈥檙e spending 50 percent of GDP, but you鈥檙e only taxing 40 percent of GDP, and so, you鈥檙e borrowing 10 percent of GDP and then that accumulates up to debt, the problem is, at some point rather quickly, financial markets may simply decide that they don鈥檛 believe that you have a realistic mechanism for paying this stuff back. And then nobody wants to buy your debt anymore. And that鈥檚 roughly what happened to Greece in 2011, and I think you want to make sure you avoid that situation.听聽
So, to me, you can have the debate, all you want about鈥攊t鈥檚 a great debate鈥攁bout what the government should be in and what the government shouldn鈥檛 be in. But I would then say, wherever you land on that debate, make sure that you also have to design a tax system that with some sort of trade off probably between efficiency and equity, you鈥檝e raised enough revenue to actually finance that level of spending, and then you don鈥檛 have to worry about having undue accumulation of government debt.听聽
I actually think there are really two very different debates. One is how big do you want your government to be? And there鈥檚 no right answer to that, or you can have a juicy debate about it. And then the second one is, okay, then how much do we want to pay for government with taxation versus debt? And I would say, 鈥淟ook, if you鈥檙e doing a bunch of government spending you think is good, and the people think it鈥檚 good, then collect the money from taxes from the people.鈥� It鈥檚 not rocket science.听聽
SEAN SPEER: Well, final question. You may not be a rocket scientist, but I鈥檓 going to ask you to be a bit of a prognosticator. We鈥檙e early in 2022. What鈥檚 your sense about the political fecundity of MMT? Are we going to see countries or governments explicitly commit themselves to MMT? Or will this remain a mostly kind of intellectual fad in certain progressive circles?聽
CHRIS RAGAN: Okay, I鈥檓 going to give you my prediction, but it鈥檚 also my hope. But I鈥檓 going to hope that this issue gets talked about enough that people come to the view that it鈥檚 just not a good way to think about your fiscal and monetary policy. And, you know, a recognition that there are good reasons why we have gotten to the place where we are today, where there鈥檚 this division of duties between monetary and fiscal policy. So that鈥檚 my prediction; it鈥檚 also my hope.听聽
But I think we鈥檒l probably talk about it for a little while longer. But I鈥檓 comforted, I guess, by the observation that when this does come up, and the people whom I read in various places, whether it鈥檚 newspapers or online sources, I don鈥檛 come across very many voices that think MMT is a good idea.听聽
To me that is comforting that there鈥檚 enough intellectual capital out there right now鈥攚hich policymakers are listening to鈥攖hat suggests that MMT is not a good way to organize your thinking, that monetary policy should keep to what it was doing before, and that the kind of constraints that apply to fiscal policy are real and you have to pay attention to them. Again, that鈥檚 just the old conservative guy thinking life is going to continue on the way it has been, but that鈥檚 my prediction, and it鈥檚 my hope.听
SEAN SPEER: Well, thank you, Professor Ragan. This has been a masterclass in unpacking a complex yet highly important topic. I think this conversation no doubt will contribute to that intellectual environment in which we鈥檙e grappling with these questions of fiscal policy, monetary policy, and Modern Monetary Theory. Thanks so much for joining us today at Hub Dialogues.听聽
CHRIS RAGAN: Thank you for having me, Sean.听
About the interviewee
Chris Ragan is an Associate Professor and the founding Director of 平特五不中鈥檚 Max Bell School of Public Policy.
Ragan was the Chair of Canada鈥檚 Ecofiscal Commission, which launched in November 2014 with a 5-year horizon to identify policy options to improve environmental and economic performance in Canada. He was also a member of the federal finance minister鈥檚 Advisory Council on Economic Growth, which operated from early 2016 to mid 2019. During 2010-12 he was the President of the Ottawa Economics Association. From 2010-13, Ragan held the David Dodge Chair in Monetary Policy at the C.D. Howe Institute, and for many years was a member of the Institute鈥檚 Monetary Policy Council. In 2009-10, Ragan served as the Clifford Clark Visiting Economist at Finance Canada; in 2004-05 he served as Special Advisor to the Governor of the Bank of Canada.
Chris Ragan鈥檚 published research focuses mostly on the conduct of macroeconomic policy. His 2004 book, co-edited with William Watson, is called Is the Debt War Over? In 2007 he published A Canadian Priorities Agenda, co-edited with Jeremy Leonard and France St-Hilaire from the Institute for Research on Public Policy. The Ecofiscal Commission鈥檚 The Way Forward (2015) was awarded the prestigious Doug Purvis Memorial Prize for the best work in Canadian economic policy.
Ragan is an enthusiastic teacher and public communicator. In 2007 he was awarded the Noel Fieldhouse teaching prize at 平特五不中. He is the author of Economics (formerly co-authored with Richard Lipsey), which after sixteen editions is still the most widely used introductory economics textbook in Canada. Ragan also writes frequent columns for newspapers, most often in The Globe and Mail. He teaches in several MBA and Executive MBA programs, including at 平特五不中, EDHEC in France, and in special courses offered by McKinsey & Company. He gives dozens of public speeches every year.
Ragan received his B.A. (Honours) in economics in 1984 from the University of Victoria and his M.A. in economics from Queen鈥檚 University in 1985. He then moved to Cambridge, Massachusetts where he completed his Ph.D. in economics at M.I.T. in 1989.
