Monthly Archives: June 2013
In defence of the AS-AD framework
I disagree with Peter Dorman (HT Mark Thoma). I have used the AS-AD framework many times in my blog posts (and I don't remember anyone ever snickering at me for doing so) because I find it useful. Paul Krugman offers a partial defence of AS-AD, with the following caveat: "So there is a place for […]
Fiscal Equity, Taxes and GTHA Transit
Federal Finance Minister Jim Flaherty has shot down Ontario Premier Kathleen Wynne’s proposal that the 34 billion dollar Metrolinx Greater Toronto and Hamilton Area (GTHA) transit expansion plan could be funded by a special regional increase in the provincial portion of the HST. For this to happen, Ottawa would have to agree to Ontario’s request […]
Friends for Myles: Social networks and tax compliance
One reason why people pay their taxes is that they’re afraid of being caught, and fined, if they cheat. In the simplest possible model of tax evasion, people only comply with the tax code if the benefits of evasion – the savings in taxes paid - are less than the costs – the probability of […]
Monopolistic Competition vs the Plucking Model
I like macroeconomics with monopolistic competition rather than perfect competition. It helps me make sense of the world. (Most modern macro models assume monopolistic competition.) I like Milton Friedman's "Plucking Model". It seems to work well empirically. But the two seem to me to be in conflict. I can't consistently believe both.
Worthwhile Canadian Initiative 
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