Macroeconomic Performance of Canada during the Recent Crisis Assignment

Macroeconomic Performance of Canada during the Recent Crisis - Assignment Example Some countries were affected immensely while others were affected less. For instance, China was never affected as Australia (Organization for Economic Co-Operation†¦, 2006; Pg. 132). The Chinese economic growth never dropped below six percent while on the other hand, Australian economy was adversely affected up to a point that it experiences no growth in its economy for the whole quarter. Other economies including Mexico, Japan, and the United Kingdom had their annual GDPs contracting by between 5 and 10 percent per quarter a phenomenon that lasted between and seven quarters consecutively (Daudelin and Schwanen, 2008; Pg. 103). Notably, Canada also was not affected greatly be the recent global economic recession; therefore, this paper aims at analyzing whether its management during this economic trying times was due to its effective economic policies or just a mare luck. Introduction Numerous research works have since been conducted on the 20060 to 2011 global economic effect an d recovery of these economies from such crisis. Most reports from these research works indicate that economies that performed better despite the effects of global economic crisis have affective capitalized banking sectors, current account surplus, low loan to deposit rations, low growth rates and levels of credit to GDP private sectors, and high foreign exchange reserves (Piersanti, 2012; Pg. 44). Therefore, it appropriate to note that the economies that managed to move from the economic crises that were facilitated by global economic crisis had efficient and adversely effective policy decisions. Moreover, their financial crises were well managed by their institutions that reduced the vulnerability of these economies’ to the financial crisis. Canada managed the global economic crisis and its economic developments despite the crisis were reflected on its sustained economic growth that was reflected mainly on the domestic spending and its continued economic growth. Additionally , it stemmed from the debts of the debt crisis affecting the euro zone sovereign. Numerous factors are preempted to have helped Canada through the global economic crisis. Some of the postulated factors include the federal fiscal plans that favored low borrowing costs; thus, enhancing the market credibility (Organization for Economic Co-Operation†¦, 2006; Pg. 78). The Canadian banking system was and has remained sound and effective that it never required the taxpayers to bail it out during the crisis. Canada has also become one of the strong merging economies that most of the world economies shifted their purchasing power towards thereby stabilizing its economy. Despite these measures, the Canadian economy was slightly affected by global financial crisis. For instance, the crisis threatened its financial market by lowering business confidence among investors (Daudelin and Schwanen, 2008; Pg. 151). This lowered the interest rates thereby increasing the mortgage debts and increasi ng housing prices. However, same financial effect or effects never affected Canada as an economy but affected some parts or cities with Canada. Additionally, Canada for long time has enjoyed credible policies and strong institutions. Moreover, for many years, the Canadian economy has been pegged on capital input and increasing labor. The multi factor productivity growth has declined and weakened further for the decades. Canada has also registered poor R & D and partnering rates. Therefore, as means of curbing these problems, Canada opted increase its innovative measures