Second, all economies must take steps to enhance their flexibility so that the adjustment doesn’t have to take place through loss of real incomes. Here in Canada, we have to continue to increase the flexibility of our markets for goods and services, for capital, and crucially, for labour.
In addition, in all three  economies the usual financing channels continued to work; government support encouraged further lending; and as house prices rose following the crisis, debt levels did too. 5 Public debt has also been on the rise in some emerging-market economies.