A COMMENT ON THE GREAT CANADIAN SLUMP

In this comment on Fortin (1996a), we argue that the sluggishness in e conomic activity in Canada in the 1990s is better explained by a combi nation of factors than by monetary policy alone. We find that: (i) it is difficult to explain the sluggishness on the basis of the historica l relationship between monetary conditions and real activity; (ii) For tin's evidence of downward nominal wage rigidity is seriously overstat ed; (iii) there are several reasons why technological change may have had a larger impact on employment in Canada in the 1990s than in the U nited States; and (iv) the build-up of government debt in the 1980s an d 1990s was much more than a cyclical problem associated with monetary policy.