While partial insurance means less insurance against shocks, and hence less ex post efficiency, it improves ex ante  7  See Corsetti, G. and Dedola, L. (2011), “Fiscal crises, confidence and default – a bare-bones model with lessons for the euro area”, unpublished manuscript. 8  See, for example, Holmström, B. and Tirole, J. (2011): “Inside and Outside Liquidity”.
The Report reviews economic and financial trends in the context of Canada’s inflation-control strategy. The Canadian economy has grown faster than was projected in last April’s Monetary Policy Report and the July Update, largely because of a surge in exports. It is now operating near its production capacity and continues to adjust to global economic developments.