Canadian Bankruptcy

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Economists tend to ignore the political side. Canada was designed by people to avoid a revolution, he says. It created institutions that specifically made it a te quinta central classical liberal democracy. The house of lords is pretty much emasculated in 19 11 - but cannon'sthe senate persists. So what's so interesting is, ah, the whole history of canada is a history of people trying to prevent certain bad things from happening.

Charles Calomiris of Columbia University and Stephen Haber of Stanford University, co-authors of Fragile by Design: The Political Origins of Banking Crises and Scarce Credit, talk with EconTalk host Russ Roberts about their book. The conversation focuses on how politics and economics interact to give some countries such as Canada a remarkably stable financial system while others such as the United States have a much less stable system. The two authors discuss the political forces that explain the persistence of seemingly bad financial regulation. The conversation includes a discussion of the financial crisis of 2008.