The risk of boom and bust The causes of economic fluctuations in Canada are varied—particularly because we are an open economy, vulnerable to the winds of global economic storms. But we as central bankers want to ensure we are lessening the occurrence of potential boom and bust periods, not causing them.
For that reason, I’d like to focus on how the dynamics associated with certain financial factors could cause boom-bust periods and how monetary policy may need to adjust to avoid being a contributing factor. 2 3  In some cases, this could include the balance sheet of government. This is related to what regulators call a suitability problem.