Monthly Archives: May 2010
Maybe the Bank of Canada won’t raise interest rates on June 1
The April CPI release is out; here is the updated graph of core inflation rates over various horizons: Core inflation started trending above the 2% target in November, and this trend explains why the Bank felt it necessary to use its April 20 interest rate decision to release itself from the conditional commitment to hold […]
The bank tax: more reasons for Canada to resist
Germany promises to keep pushing for a bank tax: Merkel to push financial reform at G20: German Chancellor Angela Merkel on Thursday called for a global levy on banks, a new European rating agency and a co-ordinated exit from stimulus measures as Germany stepped up efforts to drive financial regulatory reform… She said Germany would […]
Connecting the eurozone crisis to the Canadian economy
This looks tricky. We should perhaps start with Tim Duy's suggestion that the eurozone crisis could be a net positive for the US: The European crisis, by keeping US interest rates in check and oil prices low, may do more to help the US recovery than hurt it. It makes sense to think of lower […]
What is a “reserve currency” anyway?
I just realised I don't really know; that's why I'm asking. With the Eurozone troubles, the US dollar has been rising against the Euro. That's not so surprising. But the US dollar is rising not just against the Euro; it seems to be rising against other currencies as well, like the Canadian dollar. And gold […]
The orthodox loss of faith
I think we are witnessing the biggest silent shift in macroeconomic thought since the Second World War. For 70 years we have taught, and believed, that we would never again need to suffer a persistent shortage of demand. We promised ourselves the 1930's were behind us. We knew how to increase demand, and would do […]
The Economics of the NHL: Collector’s Edition
It was the Winter of '69. Canadians were still smarting from the refusal of the National Hockey League to grant expansion franchises to Vancouver and Quebec City. Attempts were made to prosecute the NHL under the Combines Act for anticompetitive behaviour. The NHL owners claimed they were motivated by "the love of the game". But […]
The beer and pizza theory of the Canadian recession revisited
Philip Cross at StatsCan summarises the recent recession: [T]he 2008-2009 recession in GDP was driven more by prices than volume in Canada, while in the US it was driven more by volume than by prices.
Should teaching evaluations be public?
Every economics undergraduate learns that competitive markets are efficient. But efficiency requires information. In a competitive market, a store that sells rotten apples for $2.00/lb will likely go out of business. Yet if people do not have information about the quality of apples they are buying, a store can sell bad produce and make a […]
Centre for Monetary and Financial Economics Conference at Carleton
This is where I will be today and tomorrow: "Economic and Financial Crisis: Lessons from the Past, and Reforms for the Future". I will see how much sinks into my brain, and probably post about it on the weekend.
Fiscal Federalism revisited
A French, German, and Canadian student were asked to write an essay on elephants……And the Canadian student titled his essay "Elephants: a Federal or Provincial responsibility?" The Eurozone is what Canada would be if we abolished the Federal government, leaving only the Bank of Canada. The 16 Eurozone countries are the 10 Canadian provinces. Americans […]
Worthwhile Canadian Initiative 
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