Heading into the recent recession, there were no alarm bells. Most financial experts failed to adequately anticipate or warn governments of the imminent financial doom that would follow the bursting of the U.S. housing bubble.
Even though the crash originated south of the border, a new research centre at Carleton University will help better position Canada against the threat of future recessions.
The Centre for Monetary and Financial Economics – officially launched on June 5 – will research key issues and offer expert monetary and financial economic advice to policy makers.
“The current financial crisis was a big surprise,” says Keir Armstrong, chair of the management board of the new centre and Carleton’s economics department. “Nobody realized the things that were going on could lead to such a big disaster.”
The centre will act as a better conduit between researchers and the government and banks. These partnerships will be forged through workshops and conferences, says Armstrong.
“The objective of economic research generally is to inform policy. There’s a crucial link between these things. If you don’t have that connection then basic research is only academic.”
Though clearly focused on economic issues, the research centre will draw on experts from a variety of disciplines as far-ranging as journalism and political science, making its scope one of the broadest in the country, he adds.
“One of the goals of the research centre is to promote collaboration . . . to promote a broad interdisciplinary perspective.”
While similar centres exist in Canada, the Centre for Monetary and Financial Economics will have better access to the federal government and banks in the nation’s capital, according to co-director Charles Freedman.
“There are some that work like (this) but I think there’s always room for more,” said Freedman, former deputy governor at the Bank of Canada and scholar in residence Carleton’s economics department since 2003. “We have a tremendous advantage of being in Ottawa. The centre could be an umbrella organization that helps to develop these contacts.”
In time, Freedman hopes the centre will spark the creation of courses and specialized programs at Carleton.
“These are kind of dreams at the moment,” he says.
In the wake of the financial crash, the research centre’s first task might be looking at the government’s role in regulating financial institutions. The crash itself also promises to be a central topic of research, says Freedman.
“The current situation in the global economy . . . is going to be a fertile area for research.There’s going to be a lot of post-mortems on this one.”