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Canada's Economic History

by Anu J
6 Pages
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York University
Social Science
SOSC 1340
Kean Birch

Anushree Joshi DAY 4 LECTURE – September 28 th Canada’s Economic History - Understand what’s happened historically in an economy to appreciate what is happening currently or what might happen in the future Outline - Pre-1914 o Colonial era o Post-confederation era - Interwar period - Post-WW2 period o Golden age of capitalism - Post 1970s o Neoclassical globalization o Current Key Concepts - Exchange rates / currency o Enable trade between countries  All monies have relative value with each other o Fixed exchange rates  Currencies pegged to fixed value (trade based on comparison with a fixed value)  Such fixed values include: o Gold standard (price of gold)  Earlier o Bretton Woods system (US dollars)  Post-WW2  Current, common  Cannot abuse monetary policies  Can’t just make more coins and bills  Allow for fair trade between countries o Floating exchange rates  Currencies allowed to fluctuate in response to currency exchange markets  Effects on floating exchange rates:  Investments into the country (traders, investors, banks, etc.)  Natural disasters  Government policies o Relate to two main government policies:  Monetary policy = the setting of interest rates (cost of borrowing money) by banks in order to control inflation  Aim for 2-3% inflation (rise in prices each year) Professor: Kean Birch Business and Society (SOSC 1340) Tutor: Julian Germann Anushree Joshi DAY 4 LECTURE – September 28 th  Inflation = rise in prices in each year  Seen as negative o Capital flight = money leaving the country because it’s devalued o Damage value of currency o More expensive imports  When prices increases, consumer buying power decreases; as a result, wage raises must come into effect also  If it costs a lot to borrow money, people don’t borrow money; less money in the economy; less money chasing the same economic goods; price of goods won’t rise, but fall  Low interest rates = buy more, prices go up  Fiscal policy  Relates to government taxation and spending o Government spends more to create movement o Government taxes more to curb the economic booms  Macroeconomic management Analytical Perspectives - The Staples Economy o Staples = natural resources  Fish (Atlantic colonies)  Fur (French, HBC)  Lumber (Napoleonic blockade on other  Paper for US  Gold silver  Oil and automobiles (current) o Economic historians and economists proposed this (Innis, Mackintosh) in 1930s o Canadian economy is a sparse population and relies on bulk commodity exports o Canadian political economy influences society, politics and economy  Source of external demand, demand for exports, business in Canada, jobs o 2 perspectives  Innis (negative)  Lead to lack of industrial dev  Boom in bus cycle  Resource curse; canada’s economy is limited to resource  Mackintosh (positive)  As a colonial economy, Canada was dependent upon the export of commodities because it had nothing else  Foreign investment led to an upgrade in Canada’s economy Pre-1914 Economic History Professor: Kean Birch Business and Society (SOSC 1340) Tutor: Julian Germann Anushree Joshi DAY 4 LECTURE – September 28 th - Origins as a colonial economy th o French fur trade in the 17 century  Allowed settlements to secure land against encroachment from companies like HBC o HBC (joint-stock) set up in the 1670s; challenged the French fur trade monopoly  Given trading rights in the Hudson’s Bay area  Similar to East India Trading Company - Colonial economy (pre-1867) o Businesses played a big role  Joint-stock companies  Chartered corporations  Before 1841, the upper Canada legislature (current Ontario) created hundreds of companies, charted to undertake public-benefit tasks for the colonial legislature  Clergy Corporation , the bank of canada (ADD FROM SLIDE 12) o Control over allocation and sale of land in Canada o Marketed and sold land to new colonists  Colonists ended up in debt to these organization  Provide revenues to the family compact  The family compact; oligarchy?  No election; they are appointed  Wealthy families that controlled the 60 chartered corporations  Family compacts were bankers, financial specialists, etc.  What is this…? Check out Schrauwers reading (on slide 12) o Colonial economic system
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