From A to B-: How Canadian economists grade governor Mark Carney and why

OTTAWA – A look at what economists said about Mark Carney and their final grade:

Grade: A

“He’s at the top of the class of global central banks. When you look at the some of the creativity that is now being copied in some parts of the globe, like his forward guidance, his work on financial stability, it would be hard to find many central bankers who hat done a better job.” — Craig Wright, Royal Bank chief economist.

“Certainly Mark Carney’s had the skill set in dealing with the crisis, the mechanics of it, the ability to inspire confidence when people were seized with panic, those are all valid reasons to give him a very high mark.” — Bill Robson, president of C.D. Howe Institute.

“He got thrown into the deep end immediately. Not only did he have to deal with the financial crisis and recession at the get go, I think he was instrumental in helping Canada manage its way relatively successfully. I wouldn’t go higher because I think he weighed into a few areas that were debatable … the whole dead money issue is still very much up for debate. He was categorically that people who talked about Dutch disease were wrong and I don’t think it’s so crystal clear.” — Doug Porter, BMO chief economist.


Grade: A-

“On on the plus side, he had all the qualities of a leader. He acted decisively, he spoke authoritatively, and he set the tone, which is exactly what the position required. He did not shy away from topics that can be very politically fractious, such as income inequality. But I have no idea if he was just in the right place at the right time. There’s a lot of things that could fall down because of his easy money policy, our household indebtedness problem are now at levels that eclipse where the Americans were before 2007.” — senior economist Armine Yalnizyan, Canadian Centre for Policy Alternatives.

“I take it as a given that anyone who is going to be governor of the Bank of Canada is going to be technocratically very smart, but I think he’s changed the office so that from now on we won’t have technocrats who hide in their office and not go out into the public. He connected with Canadians, they listened to him, they respected him. That’s probably his biggest legacy aside from piloting the economy through a difficult time.” — Professor Ian Lee, Sprott School of Business.


Grade: B+

“In terms of the job he’s done today so far so good. And we didn’t embrace quantitative easing in Canada, when he could have easily gone down that path. I think it would have been a huge policy misstep … now we face far fewer exit concerns. The conundrum is that he had arguable no choice but to cut, but was the cost to having done so the fact that he fed domestic imbalances in housing and consumption. The jury is still out.” — Derek Holt, vice president of economics, Scotiabank.

“Most of the time, I think he took the right decisions and for the right reasons. But it is also true that he did not do so all the time. There was a golden opportunity to raise rates in the first half 2011 and he took a pass. (That) would have been a much more powerful moral-suasion tool with respect to borrower behaviour than the watered down guidance that the Bank has had to hang on to ever since. So he’s human.” — Jimmy Jean, economist, Desjardins Capital Markets.


Grade: B-

“On the negative side, he was slow to cut interest rates when the financial crisis hit. The Bank of Canada did not cut to 0.25 per cent until April 2009. By comparison, the Federal Reserve cut to zero in December 2008. Also, he failed to address the overvalued loonie. On the positive side, he has mostly resisted misguided calls to hike interest rates since the crisis.” — Erin Weir, economist, United Steelworkers.