Social And Economic Factors In Canada

The thesis of this paper is that social and economic factors, such as increased economic nationalism, regional complexities, unemployment, stagflation, international oil crises and international monetary fluxes throughout the 1950s and 1960s in Canada contributed to the breakdown of Keynesian economic thought in the government. Keynesian economics is a method of analyzing the behavior of key aggregate economic variables such as output, employment, inflation and interest rates. This economic method was originally developed by economist John Maynard Keynes to understand the Great Depression that occurred in the 1930s. Keynesian economics heavily influenced thinkers in Canada and played a role in Canadian government policy. H.G.A Aitken has described

In any analysis of a countries economic and social breakdown, the history of those factors is imperative to recognize first and foremost. The Canadian economy notably was a relatively stable economy during most of history. The economic, social and political pressures that were brought on by World War I disrupted the Canadian economy. The government became significantly more involved in the economy as a result of the First World War and prosperity returned to some parts of Canada during the 1920s but these patterns were widely varied (Simpson, 1980). Not long after the 1920s, the rest of the world experienced severe economic crises during the 1930s known as the Great Depression. Canada did not differ either, struggling heavily to find economic growth during this decade. The US and Canada were more seriously affected by the Great Depression compared to any other industrial country; average price levels dropped 22% (Hale, p.123). Canadian economic policies went through major changes after WWII, specifically catered to address responses to the international economic shocks of the 1930s. The 1920s marked a shift in power across Canada; the federal government no longer dominated the

However, the government faced a series of social constraints during the 1970s; rising economic nationalist, increased competition among interest groups to influence the policies of the growing public sector, and centrifugal forces of Canadian politics that confronted the political and economic leadership of the federal state (Hale, p.143). The Trudeau government struggled to balance regional, social and economic interests during their period, subsequently failing to do so due to regional conflicts and the economic effects of the international oil shocks and rising deficits of the 70s (Hale, p.141). Due to the economic shocks of the 1970s it severely undermined the effectiveness of Keynesian economic policies in maintaining economic growth in