Monthly Archives: December 2010
Three Changes Making It Difficult To Find a Low Skill Job
In the comments of an earlier post we discussed the difficulty entry-level applicants are having in obtaining jobs. In this post I discuss 3 changes from the last 12 months making it difficult for workers with low- to no-skills find employment.
The Lender of Last Resort
What Paul Krugman is saying about Ireland and the Eurozone is not wrong. But he keeps missing the most important point. And it's bugging me.
Income Effects don’t really exist
I'm an expert on how non-economists think. That's because every year I try to teach 300 non-economists to think like economists. Non-economists think in terms of income effects. Economists think in terms of substitution effects. That's a stereotype that isn't 100% true, but it still contains a lot of truth. Here's how non-economists think:
Conspicuous Production
Holiday parties are a time for conspicuous production: "Would you like some bread with sun-dried tomatoes – I just baked it this afternoon? The tomatoes? Oh, they're nothing – I had stacks of them in my garden this year, so I dried them in the solar-powered food drier that I built last summer." It wasn't […]
Unobtainium and Walras’ Law
Suppose people want to spend 30% of their income on unobtainium. But the supply is zero, because unobtainium is unobtainable. So there's an excess demand for unobtanium equal to 30% of GDP. What does that imply, all you students of economics?
Random Sales, and the elasticity of supply for the option of doing nothing
This post is not about Boxing Day sales. It's about those seemingly random sales, where a good is heavily discounted for no obvious reason. A couple of years ago I went to Canadian Tire planning to buy a $200 socket set. And was surprised to find the one I wanted on special that day at […]
Best and Worst Economics Ideas of 2010
From Economy Lab: From great ideas to policy blunders, Economy Lab's experts and analysts look at 12 months of developments in the dismal science Fourteen economists give their picks including Frances, Stephen and I. Reading over the picks I kept thinking "now why didn't I choose that?!?" Also, it appears it wasn't a good year […]
Holiday pictures
Some images to capture the holiday spirit…
Milton Friedman’s Thermostat
If a house has a good thermostat, we should observe a strong negative correlation between the amount of oil burned in the furnace (M), and the outside temperature (V). But we should observe no correlation between the amount of oil burned in the furnace (M) and the inside temperature (P). And we should observe no […]
Firm Currency Exposure – Moving Beyond Transactional
Not a week goes by when we read a story in the media on how a high and rising Canadian dollar affects exporters. (See: Get ready for a $1.15 loonie) The story is typically one of transactional exposure – a company has a revenue stream in U.S. dollars and the value of that stream is reduced […]
Worthwhile Canadian Initiative 
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