Thanks to a multi-million dollar gift from the Jarislowsky Foundation, Western will continue to build its influence in central banking upon an already storied past in the discipline.
Announced Monday, the $2-million endowed gift, matched by Western, will establish the Stephen A. Jarislowsky Chair in Central Banking in the Department of Economics, with the aim to encourage excellence in teaching, mentorship and research in the field of central banking.
The Jarislowsky Foundation, based in Montreal, was founded by Canadian businessman and philanthropist Stephen A. Jarislowsky in 1991.
“Our main aim and focus is excellence. We try to do things in areas which make people in our age think,” Jarislowsky said. “When I look at your chair, it was designed to make you think about central banking. Central bankers have achieved an enormous influence on the lives of all kind of countries.
“I hope this chair will lead to better central bankers, better government and better handling of finance around the world. That is a big objective.”
The Jarislowsky Chair will focus on researching issues related to central banking within macroeconomics, monetary economics, international finance, financial markets and institutions, or a less traditional field, such as labour economics, international economics, development economics, public economics or applied microeconomics. The chair will play an important role in research centres housed in Economics and the Ivey Business School, such as the Centre for Financial Innovation and Risk Management, the Lawrence National Centre for Policy and Management and the Centre for Human Capital and Productivity.
“The timing is right for a chair in central banking because of everything that has happened since the 2008 financial crisis,” said Audra Bowlus, Economics professor and department chair. “Central bankers have been extremely busy trying to figure out if the policies they were using before the crisis should still be the policies they are using after the crisis. In order to answer this question, they look to researchers and their own research divisions. They have expanded the types of research they look at into all aspects of the economy and how their policies interact and better promote prosperity.”
For almost 40 years, Western has been a powerhouse for this type of economic thought. Feeding off what The Globe and Mail once described as a “fortuitous combination of a young, energetic and talented faculty, an influx of exceptional graduate students and the burning real-world economic questions of the period,” Western housed a collection of top, cutting-edged economic minds who launched a generation of Canadian economic leaders.
Today, Western-trained economists hold high positions within American central banks, the top spot at the Reserve Bank of Australia, as well as several top positions at the Bank of Canada.
“Western has a long-standing history of having strength in this area. Back in the 1980s and 1990s, there were a large number of people here who were researching ideas and issues of importance to central bankers and the policies they were making,” Bowlus said. “Western has always maintained strength in the areas of macro-economics, international economics and monetary policy. This chair is going to allow us to grow even more and build even more in that area.
“We are building upon that history. That is what is so important to us in our ability to make us unique.”
With that history behind it, Jarislowsky and Bowlus said expectations are high for the holder of the position. The chair will be an internationally known expert in his/her field of research, and be involved in an original and innovative research program that has policy implications of relevance to central bank decision making.
Born in Berlin, Germany, in September 1925, Jarislowsky studied mechanical engineering at Cornell University and then served in U.S. Army counter-intelligence in Japan after the war. Upon his return to the United States in 1946, he attended the University of Chicago, then earned an MBA at Harvard Business School in 1949.
He founded Jarislowsky, Fraser Limited in June 1955 in Montreal. Now Chairman and Former President of the firm, he has directed the growth of the company to become one of the largest and most successful investment management firms in Canada.
His study of history has led him to believe in the power of central banking, while still questioning some of the decisions made by central bankers over the years.
“We looked to what central bankers have accomplished ever since central banks were created about 100 years ago and we came to the conclusion that most of the decisions of these central banks were poor decisions,” Jarislowsky said. “Since central banks today are one of the main elements to creating and maintaining stability in a democracy, where the use of money is far too often used to buy votes rather than to do the things with that money that need to be done, we felt central banks, which are basically independent of the government, should learn how to be independent and learn how to make the right decisions. There are so many instance of where the wrong decisions were made, it is almost believable the art of central banking did not get to a point where people learned from their mistakes.”
Since 1990, the Jarislowsky Foundation has endowed 29 university chairs exploring subjects ranging from corporate governance and biotechnology to art history and religion. He contributes frequently to television, radio, magazines and newspapers. He is the author of The Investment Zoo, published in 2005.
“Universities have always been the place where, if you wanted to, you have the time and luxury to be able to think things through and gather the information and make major, major contributions to the world,” Jarislowsky said.
Bowlus agreed. “Universities are uniquely positioned to help central bankers with their policy decision-making and advise them through the research they actually conduct. They have the time to study what has happened in the past, what has worked, what hasn’t worked. They also have the time to reflect toward the future and project what might happen if policies were to be changed,” she said. “Out of all of that research can come policy prescriptions or policy advice as to what might be the best practices for moving forward with the Canadian economy.”
Beyond influencing policy, she stressed the value today’s best research minds can have on tomorrow’s leaders.
“The students who will be trained at Western – the undergraduates, master’s and PhD students – are going to work with some of the best and brightest in this area. They really will be the future of central banking. They will be the people who go to work at the Bank of Canada, they will go to work at the Reserve Bank of Australia or the Board of Governors in the U.S. They will be the future decision-makers and they will have their foundation come from this chair and Western Economics.”