Researchers from six of Canada’s universities have announced a project meant to determine how much control over finance technology is taking away from our banks.
The Social Sciences and Humanities Research Council of Canada announced Wednesday
it will commit $3 million to a study of the effects of technology and globalization on Canada’s economic and trade policies. The four-year study will be led by University of British Columbia’s professor of economics Thomas Lemieux, who will collaborate with researchers from Concordia, Queen’s, Simon Fraser, UWO and Univesite de Montreal researchers. Preliminary work on the study is already under way.
Lemieux says his researchers will be exploring whether Internet banking is limiting the Bank of Canada’s ability to control monetary policy.
The Net has made it easy for Canadians to conduct business with United States’ banks and international brokerage firms, which raises the question of how much control over Canadian finances the central bank even has, he says. Because electronic banking has become largely accepted in Canada, it’s much easier for people to invest in U.S. stock, for example.
“”If that’s the case, then it might make sense, when we think about monetary policy, to have a common (North American) policy,”” he says.
In many ways this study, Lemieux says, is a continuation of the debates that arose around the late 1980’s free trade agreements. Back then, the ideas of a common currency for North America entered the discussion arena. Today, with the countries of the European Union operating under just such a currency, the time to revisit this notion has arrived, he says.
Canada’s close economic ties with the U.S. have always raised the issue of whether our monetary policies being truly independent. With technology making those ties closer than ever, the question is even more pressing, he says.
The study will also have a historical aspect to it. Some of the researchers Lemieux will work with are going to compare current economic trends with what happened during the industrial revolution. Their work will test to what extent there can be lessons learnt from past episodes where we had massive technological progress.
Labour relations will also be an area of study for the team. Particularly, he says, how much technological innovation particular firms are deploying and how, if at all, that relates to their ability to retain staff.
“”The general question there would be how the new technologies are reshaping the workplace,”” he says.
The funding for this research project will come from the SSHRC’s Initiative on the New Economy. The five year $100 million program aims to broaden understanding of technology’s role in changes in management of education, enterpreneurship and the economy in general.