Economies rarely change because someone chooses the whole outcome. They change through thousands of decisions that make sense on their own, then accumulate into something much larger. What happens when the conditions that made those choices sensible begin to change?
In the season finale of Canada’s Economy, Explained, host Marwa Abdou joins Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, for a conversation about the choices embedded in an economy and the judgment required to know when those choices need to be reconsidered.
Speaking from Bangkok during the IMF and World Bank Annual Meetings, Rogers begins with the structural forces reshaping Canada and the global economy: a more fragmented trading system, shifting demographics, artificial intelligence and an environment increasingly prone to shocks. That leads to a more fundamental question: what is an economy ultimately for?
From there, the conversation examines why Canada’s longstanding productivity weakness has become more consequential, and how the country may have learned to grow around it. Rogers reflects on Canada’s reliance on labour, its underinvestment in capital and a striking reversal in where investment has flowed, with housing absorbing an increasingly large share of the country’s resources.
The discussion then turns to resilience and inflation. If businesses and governments are deliberately paying more for redundancy, security and control, how should central banks distinguish between prices adjusting to a genuinely different world and an inflation process that risks becoming persistent? Rogers discusses what the Bank learned from the pandemic, why central banking’s “factory settings” are being reconsidered and how new models and real-time information are changing the way policymakers interpret an economy in transition.
Her background in financial regulation opens another question: can a system become too focused on preventing failure? Rogers explores why regulators naturally pay more attention to risks that produce visible crises than to opportunities lost through excessive caution, and why rules designed for one moment can remain long after the conditions that justified them have changed.
Throughout the conversation, one idea keeps returning: there is rarely a free option. Affordable housing can collide with household wealth. Stability can come at the expense of experimentation. Decisions that were sensible in one environment can become constraints in another. And models built from history become harder to trust when the relationships that produced that history are themselves changing.
The episode closes where the season has repeatedly arrived: with choice. Policy, Rogers argues, is ultimately about trade-offs, and those trade-offs reflect what a society values, what it chooses and what it wants most.
If economies inherit the decisions that came before them, the challenge is not to choose perfectly. It is to recognize when the world has changed enough that the choices we inherited need to be made again.
Links:
- Carolyn Rogers – Bank of Canada
- Time to break the glass: Fixing Canada’s productivity problem — Carolyn Rogers, Bank of Canada
- Canada’s housing affordability dilemma — Carolyn Rogers, Bank of Canada
- Providing stability through uncertainty — Carolyn Rogers, Bank of Canada
- Prima: The Bank of Canada’s New Projection and Policy-Analysis Model — An Overview — Bank of Canada
In the season finale of Canada’s Economy, Explained, host Marwa Abdou joins Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, for a conversation about the choices embedded in an economy and the judgment required to know when those choices need to be reconsidered.
Speaking from Bangkok during the IMF and World Bank Annual Meetings, Rogers begins with the structural forces reshaping Canada and the global economy: a more fragmented trading system, shifting demographics, artificial intelligence and an environment increasingly prone to shocks. That leads to a more fundamental question: what is an economy ultimately for?
From there, the conversation examines why Canada’s longstanding productivity weakness has become more consequential, and how the country may have learned to grow around it. Rogers reflects on Canada’s reliance on labour, its underinvestment in capital and a striking reversal in where investment has flowed, with housing absorbing an increasingly large share of the country’s resources.
The discussion then turns to resilience and inflation. If businesses and governments are deliberately paying more for redundancy, security and control, how should central banks distinguish between prices adjusting to a genuinely different world and an inflation process that risks becoming persistent? Rogers discusses what the Bank learned from the pandemic, why central banking’s “factory settings” are being reconsidered and how new models and real-time information are changing the way policymakers interpret an economy in transition.
Her background in financial regulation opens another question: can a system become too focused on preventing failure? Rogers explores why regulators naturally pay more attention to risks that produce visible crises than to opportunities lost through excessive caution, and why rules designed for one moment can remain long after the conditions that justified them have changed.
Throughout the conversation, one idea keeps returning: there is rarely a free option. Affordable housing can collide with household wealth. Stability can come at the expense of experimentation. Decisions that were sensible in one environment can become constraints in another. And models built from history become harder to trust when the relationships that produced that history are themselves changing.
The episode closes where the season has repeatedly arrived: with choice. Policy, Rogers argues, is ultimately about trade-offs, and those trade-offs reflect what a society values, what it chooses and what it wants most.
If economies inherit the decisions that came before them, the challenge is not to choose perfectly. It is to recognize when the world has changed enough that the choices we inherited need to be made again.
Links:
- Carolyn Rogers – Bank of Canada
- Time to break the glass: Fixing Canada’s productivity problem — Carolyn Rogers, Bank of Canada
- Canada’s housing affordability dilemma — Carolyn Rogers, Bank of Canada
- Providing stability through uncertainty — Carolyn Rogers, Bank of Canada
- Prima: The Bank of Canada’s New Projection and Policy-Analysis Model — An Overview — Bank of Canada