Asset price inflation may pose a greater threat

It appears that over the past 20 years, much of our gain in national net worth has been built on a castle of sand, based on overpriced housing and unrealistic increases in stock market prices, not investment in productive assets.

Finance Chrystia Freeland and Bank of Canada Governor Tiff Macklem, pictured Dec. 13, 2021, in Ottawa. David Crane says the overpriced housing market and unrealistic increases in stock prices have the potential for a dangerous reckoning ahead, both for the Bank of Canada and for Freeland's forthcoming budget.The Hill Times photograph by Andrew Meade

Opinion

BY DAVID CRANE

February 21, 2022

TORONTO—While much attention is now being focused on the consumer price index and what it may mean for the economy, a perhaps much more threatening form of inflation—asset price inflation—may pose a greater threat. It appears that over the past 20 years, much of our gain in national net worth...

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