Monthly Archives: August 2009
Economic policy advice for the NDP, Part I: Inequality
One of the themes being played up in the NDP's convention is its attempt to 're-brand' (up to, but not quite, including dropping the 'New' from its name), and part of this is apparently an attempt to develop a credible economic platform. The NDP has historically been pretty consistent in its refusal to take advice […]
Banks, Money, and Debt
"You and I can only lend money if we've got some to lend; but banks can create money and debt simultaneously at the stroke of a pen". Might commercial banks be the cause of the increase in debt over the last few years? Maybe partly, but basically no. You can't just look at one side […]
Bagehot on “Who owns the Fed?”
Who owns the Fed? Is the Fed really privately owned? I don't know, and I don't really care (except perhaps out of idle curiosity). Learning who has really owned the Fed all these years would make little or no difference to how I view the Fed.
Money and debt
Could monetary policy have caused the recent rise in levels of debt? The obvious answer is that loose monetary policy lowers interest rates, which causes people to want to borrow and spend more, and so go deeper into debt. That answer is both obvious and wrong, as I explained in a previous post. Low interest […]
How far out of line is the Canadian exchange rate?
No one knows. There is approximately an infinity of exchange rate models out there, and according to the one(s) used at the Bank of Canada, the CAD is over-valued. I don't think anyone will strenuously object to the notion that the CAD is in some sense too high – that is, higher than what most […]
A mildly disappointing Labour Force Survey release
Well, that wasn't was we were hoping for. But even so, the past few months in which employment had gone sideways means that after 9 months of recession, employment is where it was at this time in the previous two recessions: Another series I'm watching is hours worked. It's much more choppy than employment, but […]
Sterilised, unsterilised, beggar-thy-neighbour, forex market interventions.
The Loonie has been appreciating recently. This has a number of people, including me, a bit worried. What can/should the Bank of Canada do about it?
Why did debt increase?
Updated below. I have heard the argument so many times: "Low interest rates caused people to want to borrow and spend, and that's what caused debt to increase". It's such a simple and obvious explanation; only someone with a PhD in economics could fail to understand it. Unfortunately it's also an explanation that makes no […]
Hardball, lowball and the allocation of Nortel’s assets
Paul Wells directs our attention to a piece by Roger Martin – of U of T's Rotman School of Management – in the Globe and Mail: Bankrupt Nortel Networks Corp. is auctioning off its assets to pay what it can to creditors. A key component of those assets is valuable intellectual property related to the […]
A preliminary estimate for Canadian 2009Q2 GDP growth
Three months ago, I tried to construct an advance estimate for 2009Q1 GDP growth, based on the GDP releases for the first two months and the LFS release for the third month. Here is what I came up with: The mean of [the predictive density] is -6.9%, and its standard deviation is 0.5%; the interquartile […]
Worthwhile Canadian Initiative 
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