Monthly Archives: June 2012
The Canadian fiscal union: lessons for the eurozone?
Paul Krugman noted a few days ago that [A]s far as underlying economic inequalities are concerned, the EZ is no worse than the US. The difference, mainly, is that we think of ourselves as a nation, and blithely accept fiscal measures that routinely transfer large sums to the poorer states S.C. at The Economist's Free […]
Multiple own rates of interest don’t matter, but the monetary policy target does matter
There are lots of problems with thinking about monetary policy as setting a nominal rate of interest, and trying to keep the actual real rate of interest equal to the natural real rate of interest. But multiple own rates of interest (the "Sraffa problem") isn't one of them.
Where’s the deflation? The supply side of banks
If banks go bust and firms can't get bank loans to finance their operations, that has supply side effects too. A firm that has plenty of customers, but can't get financing to produce enough goods to meet the demand, may raise prices. And if a firm closes down because it can't get financing, its competitors […]
Information and Empire
The case of the Parliamentary Budget Officer again locking horns with the federal government because of a request for information is symptomatic of a broader problem. The PBO is giving the government until the fall to release additional details of planned budget cuts or will take them to court. Naturally, in Ottawa’s current budgetary siege […]
“The Invisible Hand” on CBC radio
CBC radio is running a new program this summer on economics; it's called "The Invisible Hand". The first episode is scheduled to be broadcast Wednesday morning (this Wednesday – June 27) at 9:30 am and will be re-broadcast the following Saturday morning at 11:00 am. (Half an hour later in Newfoundland, of course.) I am […]
How to prepare a tenure file
An academic preparing a tenure file is like a lawyer arguing the case that will make or break her career. The first, vital step is to know the law. What are the requirements for tenure, as set out in the university's collective agreement with faculty? As communicated by the department chair? As established by past […]
Permanent productivity differentials and Optimal Currency Areas
Many good economists, like Simon Johnson and Paul Krugman for example, have said something about permanent productivity differentials and optimal currency areas I simply do not understand. (Lots of other people say the same thing, but when good economists say it and I don't understand it I get worried.) Maybe they are making some implicit […]
Jobs, inflation, expectations, and causation.
Matt Yglesias says that "Inflation doesn't create jobs, jobs create inflation". Well, yes and no. Both. Neither. It's simultaneous causation. It's a non-linear story, in the Artsie sense of "non-linear". And don't forget expectations. When we add in expectations, the story becomes very non-linear. Here's a simple plot summary. (OK, it's not at all simple, […]
What’s a “country”?
Take any country. Or rather, take any normal country, with its own currency. Suppose some people in that country are less "productive" (defined however you want) than other people in that country. That's normal. Now let's call the less productive people "Greeks" and the more productive people "Germans". Does calling them different names suddenly cause […]
Working on Claim in a Low Wage Economy
People value time – and money. There is a trade-off: to get more money, a person must spend less time on other things – child care or home repairs, making cinnamon buns or swimming in Meech Lake, playing Call of Duty or Tetris. In the absence of income support programs, or help from family and […]
Worthwhile Canadian Initiative 
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