Monthly Archives: July 2012
Eliminating milk quotas: a thought experiment
There are three ways to reduce the price of a product. The first is through technological innovation – the reason why the price of computing power and memory storage is now so low. The second is to cut wages, or the price of other inputs. Even though the basic technology of sewing t-shirts has not […]
Strategy space and the theory of monetary policy One
In ECON 1000 we teach that a monopolist picks a point on his demand curve that maximises his profits. We can think of the monopolist as setting a price to hit that point, or we can think of the monopolist as setting a quantity to hit that point; and we teach that it doesn't make […]
Selection bias and disagreement in blogging
Paul Krugman wrote a post about the ECB yesterday. I agree with it about, I don't know, say 90%. Here's where I disagree: 1. Paul and I both want easier monetary policy for the ECB, but he thinks of that as a temporarily higher target inflation rate, and I think it would be better to […]
Modern medicine, warts and all
Warts epitomize the dilemmas of modern medicine. They are pervasive – Verruca Vulgaris is called "the common wart" for a reason. They're not life threatening, but they diminish life quality. They can be treated with the latest high tech laser weaponry – or left to their own devices, as warts not infrequently go away without treatment. […]
Why is JSTOR so difficult (for idiots like me) to use? (Updated X2 with good news)
[Update 1: see the response from Brian Larsen, User Services Manager, JSTOR, in the comment below. I commend them for reading, responding, and for trying to make JSTOR easier to use.] [Update 2: IT WORKS! Brian has done it (for Carleton anyway, and I think he's working on the rest). And I don't even have […]
Is simultaneity necessary in economics?
I think it almost always is. In a previous post I said that economics is a "non-linear" discipline, in the "Artsie" sense of that word. Most (all?) economic models involve simultaneous causation. They don't say that A causes B causes C causes D in a "linear" (Artsie sense) sequence like billiard balls. Instead they say […]
A response to David Andolfatto – monetary policy as insurance policy.
David has two posts in which he presents a model in which price level targeting is optimal and NGDP targeting isn't. (It's best to start with his second post). His model has an interesting feature (the bit about imperfect news being IS shocks but the shocks themselves being AS shocks is really neat), but to […]
Rat choice theory
The magnificent edifice of modern microeconomics is built on a simple model of human behaviour: rational choice theory. The rational person has goals; things she wants and values. She makes choices; she acts to achieve her goals. Saints can be rational, and so can sinners. What matters is having preferences and making choices, whatever those choices […]
A Debt Interpretation of Canadian Confederation
The apparent success of Europe's leaders in dealing with the European economic crisis at their recent summit may mark the beginnings of a stronger fiscal union but exactly how this might be enforced is still a big question. The long term goal is to tie budgets, currencies and governments even more tightly together. However, without […]
Worthwhile Canadian Initiative 
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