Monthly Archives: August 2012
Calvo vs Mankiw/Reis, and IT vs PLPT/NGDPLPT
An economy is humming along very nicely in full long run equilibrium. All real variables are at their natural rates. Actual and expected inflation are both equal to the 2% inflation target. As the years go by, the price level goes: 90, 92, 94, 96, 98, and everybody expects it to continue 100, 102, 104, […]
Joint outputs
There's something a bit weird about the way we normally do economics. Or maybe it's just the examples we normally use. My mind isn't quite clear on it yet. So I'm writing this blog post. We usually talk about multiple inputs producing one output. Labour, land, and capital are inputs used to produce apples. Three […]
Why is Ontario’s Government Being So Mean to Its Teachers?
Being in Toronto for the Rimini Conference in Economics and Finance 2012 and standing in the shadow of Queen’s Park has led me to contemplate why the Ontario government is suddenly being so mean to its teachers. After years of Dalton McGuinty as the education premier with an expansion of education funding and programs, the […]
Reswitching and the term structure of interest rates
Treat this as a rough draft, on a topic I haven't thought much about for over three decades. The punch line is at the end. I may be wrong (of course). A farmer considers whether to switch to a new technique for growing food. Compared to the old technique, the new technique would produce less […]
How I spent my gap year
Some economists think the 1871 revolution was a big mistake, and led economics down the wrong path. They take their inspiration from pre-1871 economics, especially Ricardo and Marx, and proceed from there. Many of them are very smart and knowledgeable people. They think that most academic economists ignore them and know little or nothing about […]
Bureaucratic Entropy?
The Association of Ontario Municipalities is having its annual conference August 19-22 in Ottawa, the mother city of all governments in Canada. Among the items on the agenda are the keynote address on: “new secrets to leadership with five powerful tools to improve negotiation effectiveness”, a speech by Ontario’s premier (followed by the opposition leaders […]
Flowcharts as models
Give an economist a problem such as "Why do people waste their time playing video games?" and she'll typically model it like this:
Should new editions of intermediate microeconomics textbooks be banned?
The basic content of intermediate micro – choice theory, theory of the firm, market equilibrium – has not changed for decades. The latest Intermediate micro textbooks cover substantially the same material – indifference curves, budget constraints, cost curves- as do 20 year old texts. Sure, there are some differences across editions. Take, for example Eaton, […]
The Loanable Funds and other theories
This is a long and boring post. (Though some will no doubt find it highly controversial, and a very few might even get over-excited). It might be useful for economics students who want to put the Loanable Funds theory into perspective. They are my main intended audience. And maybe for those who teach them too. […]
Signs of population aging
While wandering the world in recent weeks, I've spotted some sure signs of population aging…
Worthwhile Canadian Initiative 
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