Yes, it
is right that Canada has maintained a good-level of unemployment, but never
lower than 6%, nonetheless closer to five percent which has only been possible
because of lower prices...
Lower inflation made it possible to lower interest-rate, and increase fiscal-deficit and debt...
The issue of currency-debasing never arised...
The economy even with so much of private and public-spending due to low interest rate never showed signs of overheating...
Inflation has remained below 5% from decades... and unemployment also fell considerably, but never below 6% after 80s...
Negative current-account-deficit means surplus that shows exports are higher than imports...
Without doubt increase in money-supply and depreciation increase exports and helped achieve close to full-employment unemployment-rate...
More money-supply in a low-price-regime will reduce interest rate and that kept on improving supply-side and helped maintain low inflation and unemployment, and continue expansion in spending...
Nevertheless, money-supply can work bothways... it may increase inflation and it might reduce inflation, as well... all depends on the supply-side...
In a more developed and open economy supply-side easily improves with lower interest-rate, unless it is over-supply...
But, in a developing and less liberalized-economy where domestic production and employment is protected by lower-prices and competition from abroad, supply-side and inflation still might be a problem to follow more money-supply and expansion...
Paul Krugman cannot always suggest easy-money...
For an emerging-economy the old quantity theory of money is still valid...
Lower inflation made it possible to lower interest-rate, and increase fiscal-deficit and debt...
The issue of currency-debasing never arised...
The economy even with so much of private and public-spending due to low interest rate never showed signs of overheating...
Inflation has remained below 5% from decades... and unemployment also fell considerably, but never below 6% after 80s...
Negative current-account-deficit means surplus that shows exports are higher than imports...
Without doubt increase in money-supply and depreciation increase exports and helped achieve close to full-employment unemployment-rate...
More money-supply in a low-price-regime will reduce interest rate and that kept on improving supply-side and helped maintain low inflation and unemployment, and continue expansion in spending...
Nevertheless, money-supply can work bothways... it may increase inflation and it might reduce inflation, as well... all depends on the supply-side...
In a more developed and open economy supply-side easily improves with lower interest-rate, unless it is over-supply...
But, in a developing and less liberalized-economy where domestic production and employment is protected by lower-prices and competition from abroad, supply-side and inflation still might be a problem to follow more money-supply and expansion...
Paul Krugman cannot always suggest easy-money...
For an emerging-economy the old quantity theory of money is still valid...
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