World economy worrying, but Canada in the clear

Adjunct professor and renowned economist Don Drummond discusses the roots of the global recession

According to Don Drummond, economic globalization is responsible for a messy world economy, but Canada shouldn’t worry too much about being affected.

The Canadian economist and Queen’s adjunct professor spoke about the topic on Friday as part of an annual speakers series organized by the School of Policy Studies.

Over 100 people attended the talk.

“Every [newspaper] headline will blare out that our economy is weak,” Drummond said during the talk, “but people are misunderstanding.”

The labour force is growing 0.75 per cent per year, Drummond said, with a similar productivity growth rate.

Drummond attributed Canada’s relative economic success since the 2008 recession to its small economy and fewer connections to emerging economies, such as those in China, Brazil and Russia.

According to Drummond, widespread disappointment in Canada’s current economy is based on a long-term understanding of “cyclical recovery,” the idea that developed economies rise as fast as they fall.

“If you’re expecting something more, you’re expecting the spring back from recession,” he said. “That’s not a reasonable expectation based on history.”

During his talk, Drummond added that with the increasing integration of the world’s economy, individual emerging markets will even out with developed economies and create an equalization of wages across the world.

This could negatively impact education in Canada, said Kenneth Hall, ArtSci ’13, who attended Drummond’s talk.  

“There could be a public crisis in education,” Hall said. “Standards will decrease or it will become more elitist and turn out an overall less educated population.”

However, with the national unemployment rate lower than its historic average, students can be more optimistic about employment after graduation than in past years.

Queen’s economics professor Lorne Carmichael said in the current economic climate, university graduates do have a better likelihood of landing jobs after graduation.

Canada’s unemployment rate is 0.6 per cent lower than the historic average of eight per cent over the past 30 years.

“The bottom line is university graduates are going to fare better than anyone else,” Carmichael said.

He added that the unpredictability of the world economy makes it hard to give tangible advice to students looking to prepare for their futures.

“Giving advice wouldn’t be good because things could change and turn out terribly,” he said, “but staying in school and working hard will definitely help.”

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