Monthly Archives: August 2010
Monetary policy as asset prices
As every economist knows, interest rates don't really exist. They are a mathematical construct derived from observed bond prices. Take a really simple example: suppose a bond (OK, a bill, if you want to be picky) promises to pay $100 one year from today. We observe that bond to be trading at a price of […]
The census, evidence-based policy analysis and a reversal of roles
One of the least edifying aspects of the census debacle is the government's spin to the effect that that the only people who oppose its decision to make the long form voluntary are 'left-wingers', so their concerns can therefore be dismissed out of hand. One version of this meme takes the form of the argument […]
Free Policy Research Journals for Laypeople (and Economists)
Given our conversations this weekend, this could not have come at a better time. I just received this from Facebook friend and all around good guy Bruce Bartlett – Free Economic Journals. Contains journal articles and policy papers from U.S. government departments such as the BLS, academic journals such as the Journal of Economic Perspectives […]
Liquidity and the housing market Phillips Curve
I think it is a stylised fact of the housing market that, on average, houses sell quickly when house prices are rising, and sell slowly when house prices are falling. (I am talking about house prices rising or falling relative to trend). There is a negative correlation between the rate of change of house prices […]
Why Does the General Public Have Such a Flawed View of What Economists Do?
The comments on the post Neo-classical economics is dead. Sort of. and Why economics textbooks are (sometimes) ideological show there is a fundamental disconnect between what economists do and what the general public thinks we do. There's also a fundamental disconnect on what economists believe and what the general public thinks we believe. And it's […]
The Bank of Canada’s balance sheet reverts to its pre-crisis state
Last Friday's Weekly Financial Statistics release marks the end of the Bank of Canada's policy of providing liquidity to financial markets by means of securities purchased under resale agreements (SPRA). In the first three months following the introduction of these measures in September 2008, the Bank's balance sheet increased by 56%, and almost half of […]
Why economics textbooks are (sometimes) ideological
In a recent comment on Worthwhile Canadian Initiative Tom Slee shared this experience: …{W]hen my son comes back from an Economics 101 course at an Ontario university and shows me bald statements like these from his textbook (Parkin and Bade) then I have no problem with using a broad brush to criticize the profession:… "Arguments […]
Time Spent on the Long Form Census
This is a fairly obvious point, but I don't recall seeing it discussed anywhere. When we examine the costs of a public policy, we not only need to consider the financial costs, but other opportunity costs as well. Take, for instance, the costs of an election. We not only need to consider the financial costs […]
Neo-classical economics is dead. Sort of.
Ten years ago, David Colander wrote an obituary describing "the death of neo-classical economics." Sort of. Strictly speaking, he was calling for economist-assisted terminasia:
Liquidity and used cars; liquidity as the slope of the round-trip curve
Conclusion: liquidity should not be measured by the cost of a round-trip from money into the asset and back to money. Instead, liquidity should be measured by the slope of the curve relating the cost of a round-trip against the time taken to make that round-trip. Liquidity has puzzled me for a long time. It's […]
Worthwhile Canadian Initiative 
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