The Problem of Price Level in Canada
In: Canadian journal of economics and political science: the journal of the Canadian Political Science Association = Revue canadienne d'économique et de science politique, Band 13, Heft 2, S. 157-196
About eighteen months ago I had begun to fear that Canada might come out of the war with too low rather than too high a price level. I felt that if production and employment averaged little or no higher after the war than before it, and if prices were no higher than in 1944, the national money income would sink to the point where federal revenues would develop an enormous chronic deficit of, say, 30 to 50 per cent of current expenditures. Such might be the outcome, no matter how high the rates of taxation employed. Ultimately deficits of so great a size would lead to an expansion of bank credit and hence to a higher price level, but in the meantime the country would experience a demoralizing series of political and financial crises resembling those in France between 1920 and 1927. In the design of high policy I felt that care should be taken to avoid such an outcome, which would leave our political system and our social structure greatly weakened.