The following is based on the text of the 5 November 2008 version of the CMFE Concept Note, which was the basis of then-Dean Katherine Graham’s decision to approve its creation as a Public Affairs Research Centre.
This document sets out the proposed goals, objectives, structure, and strategy for the Centre for Monetary and Financial Economics at Carleton University. An earlier draft was used to provide a focus for discussion at initial meetings on this concept involving faculty colleagues in the Department of Economics. Feedback from these meetings (held on 18 June 2008 and on 3 July 2008) was incorporated herein.
The context of monetary policy is changing rapidly. The current conditions and dynamics of the global economy are generating new and complex challenges for central bankers, policy-makers, and private-sector actors. Relatively recent problems like the U.S.-sub-prime-mortgage-induced financial crisis and the upward trend in real energy prices suggest that the traditional tools of monetary policy and the theoretical knowledge base that underpins them may be inadequate to some extent. In fact, some observers have suggested that contemporary challenges have already forced monetary policy-makers to test new practical and theoretical approaches that are not well-linked to the traditional knowledge base of the field.
Since the turn of the century, the Department of Economics in the Faculty of Public Affairs (FPA) at Carleton University has been purposefully building its capacity as one of Canada’s leading centres of expertise and innovation in monetary and financial economics. The Department has developed a critical mass of professors, across all career stages, who are leading-edge scholars in this area. Major SSHRC-funded research projects, high-achieving graduate students, and a new and popular M.A. Concentration in Financial Economics are all indicators of the gathering momentum of skills and knowledge in relation to these professors. Finance and finance-related specialists are also found in other academic units at Carleton.
3. Goals and Objectives
The overall goal of the Centre is to generate leading-edge knowledge on monetary and financial economics that can be used to inform effective public policies. The specific objectives of the Centre are to:
3.1. conduct high-quality research, both theoretical and policy-oriented, on key issues in the area of monetary and financial economics;
3.2. organize conferences, symposia, and other public events to enable the dissemination of research findings as well as debate on this research by scholars, government officials, and private-sector leaders;
3.3. set up, manage, and expand national and international networks, or communities of practice, on research and policy related to monetary and financial economics;
3.4. plan and deliver professional development courses and workshops for the public and private sectors on contemporary issues in the field;
3.5. provide training opportunities for graduate students to gain valuable knowledge and skills in research in monetary and financial economics.
4. Phased Development
The CMFE will be developed in two phases during its first five years. The general approach is to begin modestly and then grow. Start-up issues will be dealt with in the two years of Phase I, which will include the appointment of personnel to fill out the Centre’s structure (described in Section 5 below), the engagement of faculty from across the University who have interests that are in line with the Centre’s goals and objectives, and the launch of a few initiatives in furtherance of those goals and objectives. The regularization of CMFE activities, the maintenance or expansion of successful existing projects, and the development of new projects will be the focus of Phase II beginning in Year 3. A second five-year plan (Phase III) will be designed in Year 5 to build on the successes realized under the first one.
5. Leadership, Structure, and Personnel
5.1. Directorship. For the initial, two-year phase of the development of the CMFE, a co-directorship model is being employed. Two colleagues from the Department of Economics, Chuck Freedman and Steve Ferris, have been appointed by the Dean of Public Affairs to serve in this capacity.
5.2. Management Board. The work of the CMFE is overseen by a Management Board comprising nine Carleton faculty, including the Centre’s Director or Co-Directors, the FPA Associate Dean of Research and Graduate Affairs, and the Chair of the Department of Economics, who will serve as the Board’s chair for at least the first two years of its operation. The Board is responsible for (i) setting the Centre’s overall strategy and policy, (ii) advising on the development of a research agenda, and (iii) supporting the mobilization of funds to enable the Centre to achieve its goals. These terms of reference will be made more precise by the Co-Directors during the Centre’s first year. Three Board meetings per year, or one per term, are anticipated.
5.3. Advisory Committee. A largely external Advisory Committee comprising senior public- and private-sector leaders will provide guidance to the Centre. This body will have nine to eleven members, including the Centre’s Director or Co-Directors, the Chair of the Management Board, and the FPA Associate Dean of Research and Graduate Affairs.
The Committee’s general role is to advise on the research and policy work of the Centre. More specifically, it will advise the Centre on the planning and implementation of its research agenda and on the use and dissemination of its outputs. Two meetings per year are anticipated.
5.4. Research Associates. Associates of the Centre comprise members of the Department of Economics and other Carleton academic units, including the Department of Political Science, the Norman Paterson School of International Affairs, the School of Journalism and Communication, and the School of Public Policy and Administration. Good representation from the Department of Economics covering a diversity of research skills has been secured already; efforts will continue to be made to increase participation from other units as well.
5.5. Other. In the medium run, the CMFE may grow to a point where it might appoint staff on the basis of third-party funding, including exchanges with the public service. It is also expected that graduate students will be employed as research assistants on CMFE projects.
The Centre is endeavouring to develop close working partnerships with a variety of institutions. Chief among these is the Bank of Canada. Other important partnerships will be explored with Statistics Canada, the federal Department of Finance, the Federal Reserve Bank of the United States and other central banks, The World Bank, the International Monetary Fund, and the Bank for International Settlements. Other public- and private-sector partners might include commercial banks, insurance companies, investment dealers and brokers, major pension and investment companies, and other financial and investment institutions. Partners of the Centre may also include other universities, both in Canada and abroad.
7. Revenue Strategy
It is expected that the CMFE will have a variety of revenue sources—for example:
• Social Sciences and Humanities Research Council (for large, networked projects);
• fees from public- and private-sector participants at conferences;
• Statistics Canada;
• American foundation grants;
• private-sector contracts;
• individual and corporate donations.
8. Business Plan
A five-year business plan is being prepared for the Centre, which will include (i) an analysis of its competitive position and comparative advantages, (ii) detailed revenue and management plans, and (iii) a proposed program of activities and a budget for Years 1 and 2.