The Bank of Canada knows something about “unusual shocks.”
In 2003, David Dodge was in his second year as governor when the central bank confronted the SARS epidemic, bovine spongiform encephalopathy (mad cow disease) in Alberta, a mass electricity failure across Ontario and severe forest fires in British Columbia — all at the same time.
Policy-makers in the fall of that year estimated that the combination of those calamities would slow the country’s annual rate of growth by nearly a percentage point in the second and third quarters. But, “given the temporary nature of these shocks, growth is expected to rebound in the fourth quarter,” the Bank of Canada said in its October Monetary Policy Report.
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