Monthly Archives: October 2010
The NDP’s misdiagnosis
A couple of weeks ago, the NDP suggested removing the GST from heating bills, and I bemoaned the idea as just another example of a policy designed to fit a communications strategy instead of the other way around. I was hoping that the proposal would do the decent thing and go away quietly, but the […]
Is debt too high? Debt, pensions, and houses
Debt to income levels are high by historical standards in Canada and the US. Here's a recent report (pdf) from TD Economics showing household debt/income ratios at around 150% in both countries. But is that "too high"? And is that evidence that some people, like the Flopsy Bunnies, are very improvident? I'm going to play […]
The economics of health care: lessons from the animal hospital
The veterinarian called at 2:30 a.m with an update on our dog's status. The bladder stone was still stuck in Micky's urethra. Did we want to go ahead with surgery, or…? The unstated alternative: euthanasia. As I sank back on the pillow I thought "I've been teaching health economics wrong all these years."
Canada, the Eurozone, and interest rates
This is something I know I don't understand. Compare the following two statements: A: "Some Eurozone countries have higher interest rates on their government bonds, reflecting higher perceived risk of default. This raises all interest rates in those countries, and so reduces aggregate demand in those countries." B: "Some Canadian provinces have higher interest rates […]
Corporate tax cuts by the numbers
The federal government is set to reduce corporate income tax (CIT) rates from 18% to 16.5% in January of 2011, and then again to 15% in 2012. The effects of these measures have been characterised in two ways: $6b per year in tax revenues. The Liberals use this number when they explain that they are […]
Thank you, Worthwhile Canadian Initiative commentators
Thank you to the commentator who (several months ago) wrote about the anchoring effect of minimum payments on credit card statements – that's the subject of the latest Economy Lab column.
More on the Canadian Dollar, Innovation, Industry and the Trefler Piece
A follow-up to Prof Gordon's blog entry on Dan Trefler's op-ed. There are (at least) three traps you can fall into when analyzing the effects of changes to the Canadian-U.S. exchange rate on Canadian business. In my view the Trefler op-ed falls into at least two of the three traps. After the break I will discuss […]
How does an appreciating Canadian dollar prevent improvements in innovation?
Dan Trefler's op-ed in Saturday's Globe and Mail had this passage: Do we want to be an innovation-based economy? Or do we want to be a resource-based economy? Unfortunately, we can’t be both. The loonie won’t let us. Why can't we be both?
The ethics of co-authored doctoral dissertations
Every thesis is, to some extent, a collaboration between the supervisor and the student. A student will have a research topic or an idea. The supervisor can say, "this is an excellent data set," "have you read this paper?" or "try taking this approach." A meeting between supervisor and student can turn into an hour […]
Why a Dying Manufacturing Industry Leaves Canada More Vulnerable to Dutch Disease
I am really enjoying the Economy Lab feature at the Globe and Mail. Two stories in particular caught my eye: Why Canada's manufacturing sector is dwindling and Get ready for a $1.15 loonie. Keeping in mind Dan Gardner's warnings on expert predictions, both pieces hit the mark. In particular, Prof. Gordon is correct that the […]
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