Monthly Archives: August 2013
How can you get an economy INTO a liquidity trap?
We spend a lot of time thinking about how to get out of a liquidity trap. Maybe we can think more clearly about that question if we instead ask the exact opposite question. But let's be a little more precise about our question: How can you get an economy into a liquidity trap in such […]
The two James Tobins
Not many people know this, but there were actually two James Tobins. The first James Tobin (pdf) said that there cannot be an excess supply of money, because if anyone did have an excess supply of money he would immediately run to the bank to get rid of it. The second James Tobin said that […]
Banks are special because the medium of exchange is special
If we used cows as media of exchange (if we bought and sold everything else in exchange for cows), would you say that dairy farming is a special industry that is macroeconomically important? I would. Because if we used cows as media of exchange, then what happened on dairy farms would affect the supply of […]
When the textbook industry goes the way of the music industry
Over the fold is a picture guaranteed to strike fear in the heart of anyone hoping to make money in the textbook industry:
Flea Market Economics
At a flea market in Perth, Ontario (Slogan: "We buy junk and sell antiques"), I spotted a pair of used phones. The two are identical in all respects except colour and price. Why should a blue phone have an asking price $70 higher than a yellow phone? It's a simple matter of supply and demand.
What Steve Keen is maybe trying to say
Or maybe not. But either way I'm going to say it. There's a fine line somewhere between: just fixing obvious typos in what someone actually said; and totally changing what they actually said. Or maybe there is no line, and it's just a continuous slope. Anyway, I'm going to cross that fine line here, and […]
University Debt II: A Longer-Term Perspective
My recent post on university debt presented data on total enrollment, total long-term debt and the debt to revenue ratio for 20 Ontario universities in 2012. I recently updated the numbers and was able to extend the data backwards to 2000 for many but not all of the same universities. For those of you who […]
Is money exogenous or endogenous?
Most macroeconomists will (correctly) see this as a boring post (though with maybe a small bite in the last paragraph?). But some might find it controversial. I'm just trying to state the usual view clearly. Is the weather exogenous or endogenous? Meteorologists try to explain/predict the weather, so by definition the weather will be endogenous […]
Canadian Macro Performance: Better than the G-7 but…
We are of course quite used to repeated claims that Canada has outperformed all other G-7 countries in job creation and GDP growth during the recovery from the 2009 recession. Our better fiscal performance is also trotted out especially with respect to the net debt to GDP ratio. However, if instead of the G-7, we […]
The Legend of the Auto Quota: Separating fact from fiction
For people who purport to be skeptical of normative analysis, economists are awfully fond of morality tales. One of our favourites is The Legend of the Auto Quota. Once upon a time, the US imposed a quota on imports of Japanese automobiles. Japanese automakers responded by upgrading; packing every car they sold full of features. […]
Worthwhile Canadian Initiative 
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