Economic theory also suggests that, all else equal, the equilibrium real interest rate will increase. But there is less agreement about the shorter-run effects of an acceleration in productivity. The events of the past few years have provided an opportunity to learn more about them.
The Depression hit especially hard in Western Canada - at its peak, an estimated two-thirds of the people in the rural Prairies were on some form of government relief. During this time, the first elements of Canada’s social welfare system were being created. And new social pressures were altering the economic and political life of the nation.