Monthly Archives: March 2010
The Quebec budget: Will good economics be good politics?
The media are reporting that economists are singing the praises of the Quebec budget, and if asked, I'd add my voice to that chorus. This is the work of adults who take their responsibilities seriously, and the Charest government is to be congratulated for finally paying attention to what economists have been telling successive governments […]
The optimal size of government is a partisan issue. The optimal tax mix isn’t.
There are so many misconceptions about tax policy and the size of government that it's almost impossible to sort through them all. But I'm going to do the best I can.
My weekend with Liberals and Thinkers
I don't have much in the way of a comprehensive narrative for how the Canada 150 conference went, or what its implications are. My live blogging post is here, and my general impressions are below the fold.
The supply and demand for bubbles (in pictures)
I have drawn a picture of the supply and demand for bubbles. I think this picture might make it easier to understand what I was saying in my previous post on the need for a bubble. If the natural rate of interest, in an economy without a bubble, is below the growth rate of the […]
A Lucas Critique of monetary policy as interest rates
"The statistical relation between inflation and unemployment will not be invariant to the monetary policy regime". Economists will recognise that statement as an example of the Lucas Critique. They know it has implications for any policy that uses inflation to target unemployment. "The statistical relation between interest rates and inflation will not be invariant to […]
Productivity, the Canadian Dollar and Small Business – A Case Study
Based on a true story one of my clients had to deal with (besides teaching at Ivey, I am a consultant to the chemical industry). The following case explains why there could be, at least in theory, a relationship between productivity levels and fluctuations in the Canadian dollar. Consider a small company in Brampton that […]
Human capital: literal truth, fairy tale or myth?
This is from my Carleton colleague Frances Woolley: Part I: Education Every undergraduate student in labour economics gets told the story of human capital. Education and experience make people more productive. The skills so acquired are called “human capital.” This explains why some people earn more than others, and why some countries are […]
Do we need a bubble?
There is something economists have known since 1958 that we don't talk about much, except in private, like in economics journals that nobody else reads. It's a bit too weird. There are two sorts of world. In a normal world, the equilibrium rate of interest is above the growth rate of the economy. In a […]
Live-blogging the Liberals’ “Canada at 150” conference
Never underestimate the power of twitter. A few weeks ago, Canwest journalist David Akin tweeted that in addition to regular media, Canada 150 would be accrediting some bloggers as well. It turned out that the deadline had past, but I sent in my information anyway. The other day, I received an e-mail to the effect […]
In which I say something nice about the NDP
It occurs to me that I am often critical of the NDP. This is due to a combination of factors: They comment frequently on economic issues, and They get things wrong. Other parties avoid these scoldings not so much by getting things right as by not commenting on economic issues. So I should congratulate the […]
Worthwhile Canadian Initiative 
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