Monthly Archives: April 2012
Fiscal policy, ideology, and framing
TiC Take a standard New Keynesian macro model. Assume it sometimes gets stuck in a ZLB liquidity trap, where monetary policy can't work. There is a very simple solution: use fiscal policy. Government spending should be cut whenever the economy is not in a liquidity trap. That is the clear policy implication of New Keynesian […]
Compensating differentials, field of study and the Quebec student strike
Only something like 35% of Quebec students are on strike*, and in a column in today's La Presse, Yves Boivert notes that those on strike are overwhelmingly from the arts and social sciences faculties; those in natural sciences, engineering, medicine, etc have all stayed in class and their session is ending normally. His argument is […]
Three arguments for NGDP targeting
This is in response to David Andolfatto's questions. Nominal GDP is just one of an infinite number of variables that monetary policy might target. The probability that NGDP is exactly the best target variable is infinitesimal. I nevertheless support NGDP targeting, because I think it is probably reasonably close to that unknown best target variable; […]
Visualizing GDP Performance
Statistics Canada just released its GDP statistics by industry for the provinces and territories for 2011.
Designing exam questions: the realism-clarity trade-off
Which is the better exam question:
Wicksteed, stocks and flows
Flows are very very small relative to stocks. Each of us demands a flow of air to breathe, but since the flow demand is very very small relative to the stock supply of air, air is a free good. OK, that analogy is not perfect, so let me build a little "model".
The Big Three Are Still Big
Employment growth in Canada has been particularly robust in the west and nowhere is this more evident than when examining recent employment growth amongst Canada’s CMAs.
Taxing the rich: “Part of this complete breakfast”
The 'starve the beast' strategy works like this: Cut taxes. Observe that cutting taxes has produced a government deficit. Cut spending to reduce the deficit. This idea is apparently American in origin, but the US never has quite managed to get the hang of it; they keep getting bogged down at Step 2. The federal […]
How OECD governments generate tax revenues
I did a post last year documenting the choices OECD countries have made when it comes to tax rates – you might want to take a look at it before continuing. I'll wait here. Okay, welcome back. Given the recent attention ([1],[2],[3]) given to the link between tax rates and tax revenues, this post is […]
Short vs long-run natural rates of interest
Just a quickie, because I'm (supposed to be) grading exams. I want to suggest a small change in Paul Krugman's two recent posts (here and here). One that would narrow the gap between his way of thinking and (say) Scott Sumner's. Desired saving and desired investment depend on a lot of things. One of the […]
Worthwhile Canadian Initiative 
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