“Dead money,” as it has been called, is not a uniquely Canadian phenomenon. Researchers in the United States have advanced an explanation based on their statistical work that is both intuitive and convincing.5 They have shown that uncertainty exerts a significant and distinct dampening effect on investment decisions, separate from other factors that might be closely related to it.
Their results have been replicated by researchers elsewhere, and one can see a tight correspondence, if not causal relationship, between their measures of uncertainty and fixed investment activity. It would not be surprising if businesses were a little gun-shy and reluctant to commit large sums of money following the traumatizing experience of the crisis.