Monthly Archives: September 2009
Journalism and Economics
Brad De Long thinks very highly of Greg Ip, even when Brad thinks Greg gets something wrong. Brad thinks Greg is very sharp. So do I. But the other reason why Greg Ip is such a good economic journalist is that he was thoroughly trained in both Journalism and Economics. And I'm very proud to […]
The federal deficit is small, manageable problem with a simple solution. So why are politicians being so boneheaded?
The editorial cartoon in yesterday's Le Soleil has the best take I've seen yet on the issue of how to deal with the federal deficit. The target is Michael Ignatieff, but it could just have well have been Stephen Harper, because their positions on this issue are identical. Here is my approximate translation of the […]
Can rent controls cause a recession? A response to Scott Sumner and Bill Woolsey
There is a perfectly sensible theory that says that rent controls reduce labour mobility and can therefore worsen structural unemployment. I'm going to ignore that sensible theory and put forward a silly theory — one I believe is wrong. But I'm putting forward a silly theory to make (what I think is) a sensible point, […]
The hub and spoke model of money — a rejoinder to Arnold Kling
The textbooks say that money serves as: store of value; medium of account; and medium of exchange. Arnold Kling seems to miss the importance of the fact that money is a medium of exchange. Worse, he misunderstands me, thinking that I am one of those economists who makes a big deal of money's role as […]
Mackerels and Money
Arnold Kling asks: why are mackerels different from money? Why should the M in MV=PY stand for money, and not mackerels? Why can't an excess demand for mackerel cause a recession? Why can't an excess supply of other goods be matched by an excess demand for mackerel? Keynesians don't know the answer to this question […]
Does CMHC have big enough reserves?
This post is more of a bleg; because I'm sure someone reading this knows more about the answer than I do. An insurance company doesn't need reserves if it is insuring a large number of short term uncorrelated risks. The Law of Large Numbers ensures that its annual claims will equal its annual premiums, if […]
So where’s the market failure (in macroeconomics)?
Mike Moffatt asks the right question; and it's the economist's question. In economics, if we think the price of x is too high, we don't just say "we should lower the price of x". We look for the underlying causes of the price of x being too high. "Where's the market failure?"
Dark Age in Macroeconomics? A History of Taught approach
(Or maybe the title should be: "Notes from the Phelps/Lucas Administration"; or "Notes to supplement our fading memories of the late 1970's".) Is this a Dark Age in macroeconomics? In other words, have we collectively forgotten some (important) stuff that we used to understand? I want to approach this question by looking at what was […]
On the form of the Canadian recovery
There's a certain amount of speculation about the form of the US recovery, based on scenarios of how its economy will work its way out of a balance sheet recession. As I understand it, the main candidates are (in alphabetical order): U: The US economy grinds along as households deleverage themselves, and the economy picks […]
Sandra Peart is blogging again. Please adjust your feeds accordingly
Adam Smith Lives! (A history of economic thought blog) is back from an administratively-induced hiatus. From her latest post: David Levy and I are working on the role of experts and expertise in social science. We're much concerned of late — in the light of the financial meltdown and various successful ponzi schemes — with […]
Worthwhile Canadian Initiative 
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