Monthly Archives: October 2011
Monetary policy as threat strategy. Chuck Norris and central banks.
Central banks run monetary policy not so much by doing things, but by threatening to do things. If their threats are credible, we never observe them carrying out those threats, and we often observe them doing the exact opposite A credible central bank is a bit like Chuck Norris. (Apologies to Lars Christensen for stealing […]
The optimum size of the central bank?
In 1969, Milton Friedman wrote an essay on "The Optimum Quantity of Money". Another way of framing this question is to ask: what is the optimum long run growth rate in the money supply, or the optimum long run inflation rate? I want to suggest a different way of framing this same question: what is […]
Appeasing anti-tax sentiment
Alex Himelfarb has an opinion piece in today's Globe and Mail on the 'anti-tax' sentiment that has grown to play such a dominant role in Canadian politics. Although I agree with his diagnosis, his prescriptions are not so much a plan for countering anti-tax sentiment as they are a symptom of its hold on public […]
Sustainable Universities
Judging from some of the ruminating going on in the media lately, it would appear that Canadian universities will soon be facing a new assault under the mantra of sustainability. Some of this is a spillover from the United States where rising tuition fees have exceeded the general inflation rate fostering a view that higher […]
In applied economic research, what actually matters?
"his friend Mr. Darcy soon drew the attention of the room by his fine, tall person, handsome features, noble mien; and the report which was in general circulation within five minutes after his entrance, of his having ten thousand a year." Jane Austen, Pride and Prejudice. Taller men are more desirable marriage partners. One theory […]
James Hamilton on Christopher Sims and identifying monetary policy “shocks”
I am not an econometrician. I'm not very good at econometrics. Read this post in that light. I think that what some econometricians are doing is horribly wrong. They are making a wildly implausible assumption. I want to give my reactions to what James Hamilton said about what Christopher Sims said. James is nicely clear.
When is a missing observation not really missing?
Imagine you want to learn about the causes of disability in Canada. You could structure your questionnaire in one of two ways.
How to borrow money
The process is quite easy, provided you borrow enough. Have you ever, dear readers, had occasion to borrow money? Have you ever borrowed ten dollars under a rigorous promise of your word of honor as a Christian to pay it back on your next salary day? Have you ever borrowed as much as a million […]
The macroeconomics of Big Wedding cultures
How do you build a macroeconomic model of a "Big Wedding" culture? Do Big Wedding cultures spend too much on consumption and too little on saving and investment? If so, what's cause and what's effect? I don't know the answer. I don't even really need to know the answer. But this question has been stuck […]
Why do people think that Canadian job creation rates require a policy response?
Pundits and politicians are calling on the government to "do something" about the state of the Canadian labour market; these calls are presumably based on a perception that job growth is still weak. It's not clear upon which data this assessment is based. The data that would be most informative are no longer being collected, […]
Worthwhile Canadian Initiative 
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