Monthly Archives: August 2013
New Keynesians really need the Pigou effect
Because otherwise their models won't work. And yet the canonical versions of their models, which don't even have money, cannot have a Pigou effect. And so New Keynesians are guilty of the Old Keynesian accusation of "just assuming full employment". Here's why: In Old Keynesian models, if Aggregate Demand is too low, a cut in […]
Wealth, Religion and Inequality
In nineteenth century Canada, religion was a very important institutional and social force and via its social networks affected employment opportunities and ultimately income. Via both direct and indirect effects, religious affiliation invariably affected asset accumulation and wealth and by extension must also have affected wealth inequality. Indeed, when it comes to examining the wealth […]
David Laidler goes meta on “What would Milton have said?”
I tried to persuade David Laidler to join us in the econoblogosphere, especially given recent arguments about Milton Friedman. I have not yet succeeded, but David did say I could use these two paragraphs from his email: "However – re. the "what Milton would have said" debate – When I was just getting started in […]
Bob Murphy, George Orwell, me, and the meaning of inflation
I think (not 100% sure) that Bob Murphy accuses me (and Scott Sumner) of doing something sort of Orwellian. Dunno, but I don't think I am. (And BTW, I don't think Austrians are necessarily doing anything Orwellian with their way(s) of using the word "inflation", though maybe some of them are being a bit overly […]
The National Household Survey has lost the benefit of the doubt
Everyone knows – and should have known – that the numbers from the National Household Survey (NHS) would be dodgy. Statistics Canada has always claimed that the NHS numbers would be useful for many purposes, and this line has been swallowed by many. After all, Statistics Canada has a deserved reputation for professionalism, and their […]
Paul Krugman, Ricardian Equivalence, and the Pigou effect
If I produce a car, and sell it, and undertake no obligation to service that car (by changing the oil), and undertake no obligation to buy back that car, and if nobody can sue me if that car goes wrong, then that car I have produced and sold is not one of my liabilities. That's […]
The strong monetarist dark force of eventual macroeconomic self-equilibration
There must be some macroeconomic equilibrating force out there we don't know about. A dark force. It's sometimes slow to work, but it does work eventually. And whatever it is, it must make monetarism truer than it theoretically would otherwise be. A monetarist force. And whatever it is, it must be much stronger than a […]
University Debt: The Perils of Being Small
You may recall my recent post on Ontario university financing in which I focused on the university debt levels of Brock, Wilfrid Laurier and Guelph given that they were undergoing program reviews designed to address “sustainability”. Well, I have done a bit of an update by getting information on long-term debt, total revenues and enrolment […]
Oprah Winfrey, victim of racism – or marketing?
Oprah, one of the richest women in the world, was in Zurich, Switzerland, when an assistant at an upscale handbag shop told her the purse she was looking at (worth over $35,000) was “too expensive” for her. [Globe and Mail] Winfrey – and just about every single media outlet in North America – interpreted the incident as […]
Love, paternalism, selfishness – and money.
Smokers smoke. Gamblers gamble. Drinkers drink. Why should anyone else care? Some non-economists believe that economics assumes selfishness. Each person is only concerned about themselves, and their material consumption. Selfishness can be represented formally like this: u=u(x) (1) A person's "utility", their well-being or happiness, is a function, u, of their consumption of goods and […]
Worthwhile Canadian Initiative 
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