But I believe we are now at the stage where the payoffs from these necessary adjustments have begun to outweigh the difficulties. One of the major benefits has been the marked decline in our interest rates since late 1995. Many interest rates in Canada are now at their lowest levels since the 1960s.
Overall welfare will be adversely affected, for example, if capital inflows mainly fuel a speculative housing bubble. It has now become obvious that unproductive use of foreign capital was widespread in the years prior to the financial crisis and that several countries have been living beyond their means.