Canada Retired Central Bankers Swap Suits for Bicycle Helmets at Carleton
Charles Freedman has recruited two other former deputy governors to the Centre for Monetary and Financial Economics since it opened in June 2009, and two of the central bank’s current deputies are serving as advisers to the Ottawa school, which more often leads the country in athletics, not academics.
The contingent of central bankers is almost as large as the six-member Governing Council that sets interest rates in the world’s 10th largest economy, and the center’s influence has brought Governor Mark Carney and then-U.S. Federal Reserve Vice Chairman Donald Kohn to Carleton as speakers.
Former Senior Deputy Governor Paul Jenkins, 62, and former deputy David Longworth are research associates, while current Senior Deputy Governor Tiff Macklem, 49, and Deputy Governor John Murray are on the advisory committee. “Hopefully over time we will develop a reputation that can attract some more people,” Freedman, 69, said in a telephone interview.
The university hasn’t always been the first stop for Canadian economic thinkers -- Carleton ranked seventh out of 12 similar schools in annual rankings by Maclean’s magazine last year, and was dead last in the comprehensive category in 2006. In contrast, Carleton’s men’s basketball team has won six of the last eight national championships and hasn’t lost this season.
‘Quite a Coup’
Collecting the central bankers is “quite a coup for the university,” said Craig Alexander, chief economist at Toronto- Dominion Bank, and President of the Canadian Association for Business Economics. “I am going to be interested to see what comes out of Carleton University in terms of research -- you are talking about a lot of intellectual capital.”
Some of the center’s members met over sandwiches last month to share potential research topics, said Steve Ferris, an economics professor and co-director of the center with Freedman.
The school allows the former policy makers to “look back on things with a little more insight,” Ferris said. One of the institute’s advantages is that the former colleagues know they can “speak more freely” in pursuing ideas that pique their interest, he added. This contrasts with a career at the central bank where convention required deputies to hold to a consensus.
Among the topics the group is looking at is a link between declines in stock prices and consumer confidence that may have worsened the global credit crisis, Ferris said.
Longworth, 59, said the school fit his plans for retirement by allowing him to “participate in academic life through participating in seminars, advising Ph.D. students, and continuing to do some research,” he wrote in an e-mail message. “I don’t feel constrained in the conclusions that I come to.”
Speaking Their Mind
The school “allows for a wider range of ideas, wider range of possible opinions,” said Jonathan Basile, an economist with Credit Suisse in New York, and the third most accurate forecaster of Canadian data in a Bloomberg News survey covering the last two years. The Bank of Canada “is not the same as the Fed where all officials can speak their mind.”
Helping to bring the officials together were “a lot of small-world coincidences,” Ferris said. Freedman’s wife taught at Carleton, he said, and another school official lived on the same street as Jenkins, who sometimes rides his bicycle to the campus.
“One of the advantages of a place like Ottawa is you have retired central bank officials, you have retired treasury officials,” Freedman said. Such expertise may be harder to find in Montreal, home of McGill University, or Kingston, Ontario, home of Queen’s University.
Prior to retiring, Longworth and Jenkins helped Canada exit a global recession linked to the 2008 credit crisis before other Group of Seven countries. Inflation also remained close to the 2 percent target; consumer price inflation averaged 1.9 percent between 2003 and 2010, the term Jenkins and Longworth served in their top roles.
For the Bank of Canada, the participation of its officials adds to its efforts to sharpen monetary policy research, said spokesman Jeremy Harrison.
“The board is informal and is very much in the spirit of fostering discussion within the academic community,” Harrison wrote in an e-mail message.
The Carleton group expands the links the bank already has with the C.D. Howe Institute of Toronto. Former Governor David Dodge is on the board of directors, and former Governors John Crow and Gordon Thiessen are senior research fellows along with Jenkins.
“You have a geographic influence there at Carleton because I think many of them still live in Ottawa,” said Finn Poschmann, vice president of research at C.D. Howe. “They are people that I am going to want to tap.”
What the ex-officials haven’t received so far at Carleton are perks, such as separate offices, or even a phone with voicemail. “There are always space constraints at universities so we share an office,” Freedman said. “We all show up without suits, which is very nice.”
To contact the reporter on this story: Greg Quinn in Ottawa at firstname.lastname@example.org.