Monthly Archives: April 2012
Teaching inflation targeting with ISLM
In intermediate macroeconomics the ISLM model (and the Mundell-Fleming ISLMBP open economy version) is the main workhorse. But we also want to teach how the Bank of Canada (or whatever) targets inflation. This post is about how I use the ISLM to teach inflation targeting. It's a bit clunky, and I haven't got all the […]
Quantitative Time Travellers
The price of gas relative to the price of milk has been trending upwards for the past 40 years:
From gold standard to CPI standard
Inflation targeting is a much better monetary policy than the gold standard. But that's not what this post is about. Is there any fundamental theoretical difference between how monetary policy worked under the gold standard and how monetary policy works today for a modern inflation-targeting central bank? That's what this post is about. If you […]
Trade Shift?
Well, Stephen Harper’s recent statement during a talk at the Woodrow Wilson International Center as reported by the Globe and Mail during his recent visit to the United States that: “We cannot be in a situation where really our one and only energy partner can say no to our energy products” underscores what seems to […]
Asymmetric Redeemability question: if the Fed pegged to the loonie?
One of the things I was a little disappointed about in the recent money and banking controversy was that nobody (IIRC) picked up on my (it's not original to me) point about asymmetric redeemability. The Bank of Montreal promises to redeem its (demand deposit) dollars for Bank of Canada dollars, while the Bank of Canada […]
“Monetary policy is just one damn interest rate after another”
No it isn't. History might appear to be just one damn fact after another, but it's the job of social scientists to make sense of those facts, and try to explain the endogenous facts in terms of (relatively speaking) exogenous facts.
The case for taxing basic groceries
Economists frequently argue that taxing basic groceries is a good idea – for example, see these papers/posts making the case for taxing food in the US, Canada, and New Zealand.
“The supply of money is demand-determined”
Rant mode on. It made my flesh creep just to type that title. Some statements are right. Some statements are wrong. Some statements aren't even wrong. Some statements, like the one in my title, aren't even not even wrong; they are just gibberish.
Worthwhile Canadian Initiative 
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