Monthly Archives: November 2011
The inflation fallacy
Sometimes I despair. Sometimes I wonder if the inflation fallacy is at the root of all the US and Eurozone troubles. It's so easy to get popular support for the idea that printing money will cause inflation, and inflation means a fall in our real income. So it's much better to have high unemployment, low […]
Tightening money and widening Eurozone spreads
How do we know the Eurozone crisis has been getting worse over the last few days? The indicator that I watch most closely, and I think others watch most closely, is the yield spread between German government bonds and the bonds of other Eurozone governments. If those spreads widen, it means the crisis is getting […]
On ‘first-order’ and ‘top-end’ inequality, and why the distinction is important
The debate about income inequality seems to be happening at two levels, which I'm going to label "first-order" and "top-end" inequality. First-order inequality is visible in standard measures such the gini coefficient, and shows up as an increase in the gap between average and median incomes. Top-end inequality refers to the share of income that […]
What could we do better?
We're sending the blog in for a tune-up. We're planning to tidy up the side-bar, make the "search" function easier to find, and do a few other small tweaks. What changes (if any) would you like to see?
Instrument rules, target rules, NGDP, complexity and learning
At one extreme you have pure discretion. The central bank does whatever it thinks is best. At the other extreme you have an instrument rule. The rule specifies exactly how the central bank should set the monetary policy instrument, conditional on the indicators (i.e. conditional on its information). The Taylor Rule is an example of […]
Worthwhile Sumnerian Initiative?
Spotted at Marginal Revolution - a proposal by Scott Sumner: Replace the corporate tax with a payroll tax of x% on everyone making more than $100,000/year. Have x% be the tax rate that replaces the lost corporate tax revenue. That would help the poor, it would help the middle class, and it would help the rich. […]
Could you pass Eco 100?
My best friend's son is taking Eco 100. While studying for his midterm exam, he encountered this question: True or false: There is no difference between these two equilibrium equations in Eco 100 consumer theory as one equation can be transformed mathematically into the other (a) MUx/MUy=Px/Py (b) MUx/Px=MUy/Py. What do you think? Is this […]
Seaways and Separatism
Like every Canadian my age, I was taught about the St Lawrence Seaway in school. But I never fully understood why it was built or how it worked. So, while in Montréal this past weekend, I decided to cycle the length of the Lachine Canal, and around to the Lachine Rapids (pictured on the right), to […]
Politics and Taxes
I wanted to weigh in on Stephen Gordon’s post on the Ontario HST reduction but found my entry in the comment box growing so here is a post instead. Why are the Conservatives and more to the point the NDP supporting what seems like a redistribution to higher incomes? Well, I think it comes down […]
The ECB’s internal contradictions
The Eurozone news is really depressing. I think things are going to be very bad very soon. I don't have much to say that I haven't already said in previous posts. But thought I would add this anyway, FWIW. The ECB doesn't like inflation uncertainty; it wants to keep inflation predictable and just below 2%. […]
Worthwhile Canadian Initiative 
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