EDMONTON — For the second time in three years, a team of economics students from the University of Alberta has won a national student competition put on by the Bank of Canada.
The team’s presentation focused on how inflation and higher interest rates are putting a squeeze on the Canadian economy in general, and people in lower income brackets specifically.
For the eighth annual Governor’s Challenge, students were asked to take on the role of advisers to the bank’s governing council and recommend whether to raise the bank’s key interest rate, lower it or leave it unchanged.
Five fourth-year students — Selam Abraham, Vivek Gala, James Davison, Kayla Stephanson and Aishwarya Tyagi — competed against teams from Carleton University, Université de Sherbrooke, St. Francis Xavier University and the University of British Columbia in the final round. Associate professor Malik Shukayev and assistant lecturer Max Sties in the Department of Economics were the faculty advisers.
“If you look at the different basket items within inflation, you see that the major contributors to inflation right now are the necessities,” says Abraham, who was responsible for tracking domestic economic trends.
“It’s food, it’s shelter, it’s transportation. And so what that means is at the same time that the whole economy is facing high inflation, lower income quintiles, because they spend a larger share of their income on the necessities, inflation is hitting them much harder.”
Given their findings, the team recommended that the Bank of Canada hold its key interest rate at 4.5 per cent.
“It was overwhelmingly beautiful and just generally overwhelming,” says Abraham of the experience.
Gala added, “you really feel the weight or the gravity of the decisions that get made there.”
To read the full story, click here. To speak with any of the participants please contact:
Debra Clark
U of A communications associate
debra.clark@ualberta.ca