Monthly Archives: February 2011
How the federal government went from persistent surpluses to persistent deficits
Update: See this follow-up post, which corrects some mistakes made below. I've added comments pointing out which parts needed revision. In the early years of the millenium, the federal government ran what appeared to be an indestructible series of budgetary surpluses. No matter how many tax cuts were implemented, it ended each year with a […]
The political economy of rising tuition
Some facts about university finances in Canada: 1. Undergraduate tuition has doubled in real terms in the last twenty years; tuition in professional programs has risen much more rapidly. 2. University enrolments are growing, as the participation rate – the percentage of people in a given age group attending university – continues to rise. 3. Each […]
Why New Keynesian macroeconomists are against labour unions
Like all New Keynesians, I believe two things that are apparently contradictory: 1. We each get paid too much; 2. Because of 1, we all get paid too little. It only makes sense if you understand fallacies of composition. What is true of each part isn't necessarily true of the whole.
Have universities reached the tipping point?
In 1983, a t-shirt cost about $10 or $20, an album $10 or $15, and undergraduate tuition at University of Waterloo cost $1313.74 annually for architecture, its most expensive undergraduate program. In 2011, a first year architecture student at University of Waterloo pays $7,697 in fees each year (and architecture is far from being University of Waterloo's most expensive program). […]
Divine Coincidence Failure. UK lessons for the Bank of Canada
According to "divine coincidence", the monetary policy that is best for stabilising inflation is also best for stabilising real output. Divine coincidence seems to be holding up fairly well in Canada. But the recent UK experience is a case where divine coincidence has failed. The Bank of Canada's inflation target is up for renewal this […]
Fiscal Policy, the Environment, and How Not to Solve Policy Problems
Canada and by extension the Canadian government faces a number of challenges. There are two in particular I find fascinating:
Does female employment raise or lower savings rates?
When female incomes rise, household expenditure patterns change. One oft-quoted survey paper suggests: men spend more of the income they control for their own consumption than do women. Alcohol, cigarettes, status consumer goods, even "female companionship" are noted in these studies. Another well known paper found that a UK policy change that transferred resources from […]
Reconciling the Minimum Wage Literature
I'm a health and fitness nut, so I read a lot of health studies as well as using my own body as a guinea pig. I've discovered a lot of things – for instance, I don't know if using creatine monohydrate leads to more strength gains than using a placebo, but I do know it makes you […]
Helmer for the Defense: The Liberals and the CIT
In CIT Cuts: The Waiting Until We Can Afford It Argument I characterise the Liberal position on the corporate income tax as incoherent at best and advocating counter-cyclical tax policy at worst. My very good friend and dodgeball teammate Jesse Helmer has an excellent defense of the Liberal position. In the interest of fairness, I thought you […]
When is a ban a subsidy?
In the United States, surrogate mothers receive fees of about $20,000 to $25,000 for their services. In Canada, the U.K., Australia and a number of other countries, commercial surrogacy is outlawed, but surrogates are compensated for expenses, for example, clothing, food, prenatal vitamins, childcare, travel costs, lost wages, medications, medical bills, etc. In the U.K., reported expenses range […]
Worthwhile Canadian Initiative 
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