It would have to rely upon very strong policy conditionality and reinforce incentives for pre-emptive fiscal and macroeconomic adjustment. Some economists think that a too long period of low interest rates can endanger financial stability. It seems that new financial bubbles are growing in the emerging markets.
As events played out, we updated Canadians on when the conditions were likely to be satisfied. Markets could also update their own views as data came in. How did our views and policy response evolve? The recession Canada faced was nothing like a textbook case and there was exceptional uncertainty about how it would play out.