------ EH.NET BOOK REVIEW ------
Title: Canadian Policy Debates and Case Studies in Honour of David Laidler

Published by EH.NET (April 2011)

Robert Leeson, editor,/ Canadian Policy Debates and Case Studies in Honour of
David Laidler/. New York: Palgrave Macmillan, 2010. xiii + 234 pp. $100
(hardcover), ISBN: 978-0-230-23734-6.

Reviewed for EH.Net by Herb Emery, Department of Economics, University of
Calgary.

This Festschrift volume honoring David Laidler presents a collection of
papers by prominent economists and policy analysts focused primarily on
Canadian policy issues.  David Laidler is one of Canada’s most influential
monetary economists. As noted throughout the volume, Laidler’s academic
publications and policy commentaries influenced decisions and operations of
the Bank of Canada, most notably the Bank’s adoption of inflation targeting
in the early 1990s, and other areas of governance in Canada.  Reading the
volume, it is difficult to not be impressed by the fact that two previous
Bank of Canada Governors (Gordon Thiessen and David Dodge) pay tribute to
Laidler in the Preface to the volume and a third, John Crow, provides a
discussion of a chapter in which he provides praise of the highest order when
he states that “David is also a bit of an economic historian.”

This volume is not a history book but instead an example of the utility of
history for informing policy making and perhaps a reminder to reconsider what
we consider history. In her chapter “The Lender of Last Resort: Lessons
from Canadian History,” Angela Redish summarizes David Laidler’s career
as “insightfully combining the history of monetary thought with a hands-on
approach to monetary policy” (p. 80).  In his chapter, “Inflation
Targeting in Canada,” Peter Howitt highlights Laidler’s belief that to
understand macroeconomic performance involves understanding the role of money
in the adjustment mechanisms and behavioral rules of a modern economy which
“evolved differently across time and space depending on particular
historical circumstances” (p. 42).  It is notable that an accomplished
macroeconomist like Howitt identifies this part of Laidler’s work as
something that distinguishes him from mainstream macroeconomists.  Economics
as a discipline has become largely ahistorical often counting information
from the pre-2000 era of limited use or interest unless it aids as an
identification strategy in an econometric model. The Laidler tribute volume
is a reminder that this orientation of economists away from history is not
consistent with the intellectual approach of earlier generations of great and
influential economists for policy such as Maynard Keynes, Milton Friedman and
John Kenneth Galbraith.

Angela Redish’s chapter, “The Lender of Last Resort,” is the only
chapter in the volume which is clearly “economic history.”  While the
chapter is motivated as building on some of Laidler’s more theoretical work
on lenders of last resort, Redish’s chapter is an excellent overview of the
evolution of Canada’s banking sector and its comparison to that of the
United States.  This chapter provides an accessible overview that would be
an outstanding addition to reading lists for courses in Economic History or
Monetary Economics.  Several other chapters are not historical studies but
historical context is prominent in the material. Bill Robson in “The
Canadian Monetary Order: Past, Present, and Prospects,” provides an
overview of monetary policy in Canada since World War II as part of making
his case that the adoption of inflation targets for monetary policy in the
1990s has brought Canada close to having an ideal monetary order.  John
Whalley describes Canadian trade policy since Confederation in his chapter,
“Canadian Policy and the Economic Revolution in Asia,” to help the reader
understand how Canada’s trade interests and trade policies may change with
the high rates of growth in many of Asia’s national economies.  The
chapters on Canadian Medicare by Ake Blomqvist and tax incentives for owner
occupied housing by Finn Poschmann consider historical context as well, but
over a shorter time period.

Another feature of the chapters in this volume that historians will
appreciate is the comparative aspect of the discussions.  Redish and
Poschmann consider Canadian policies and institutions in comparison to the
United States, while Blomqvist discusses options for reforming Canada’s
health care system using experiences from the U.S., UK, Australia, Sweden and
other European nations.  Goodhart’s chapter on the political economy of
inflation targets looks at the experiences of New Zealand, the UK and
Canada.  Clark Leith investigates whether Laidler’s work on the
desirability of Canada entering into a North America Monetary Union has
lessons for informing Botswana’s policy options around joining a monetary
union of southern Africa countries.

I am often asked by colleagues in other countries for recommended sources
describing Canadian institutions and policy.  This volume is one that I will
add to my list of recommended sources given the high scholarly caliber of the
chapter contributors and the accessible and highly readable discussion of a
wide range of macroeconomic policy topics.  Perhaps the highest praise I can
give a volume paying tribute to an economist is that this volume is an
efficient way to learn about Canadian policy issues.

Herb Emery is the Svare Professor in Health Economics at the University of
Calgary and Managing Editor of /Canadian Public Policy/Analyse de
Politiques/.  He recently published "‘Un-American’ or Unnecessary?
America's Rejection of Compulsory Government Health Insurance in the
Progressive Era," /Explorations in Economic History/ 47 (1) (2010): 68-81.
[log in to unmask]

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied
for non-profit educational uses if proper credit is given to the author and
the list. For other permission, please contact the EH.Net Administrator
([log in to unmask]). Published by EH.Net (April 2011). All EH.Net reviews
are archived at http://www.eh.net/BookReview.

Geographic Location: North America
Subject: Economic Planning and Policy, Financial Markets, Financial
Institutions, and Monetary History, History of Economic Thought; Methodology
Time: 19th Century, 20th Century: Pre WWII, 20th Century: WWII and post-WWII