Monthly Archives: August 2013
“Is the macroeconomy self-equilibrating?” is a stupid question
"At the macroeconomic level, is the market economy self-equilibrating?" I used to think that was the most important and fundamental question in macroeconomics. Now I think it's a stupid question that doesn't make sense. So when I read Paul Krugman saying: "Think of it this way: Friedman was an avid free-market advocate, who insisted that […]
The Department of Finance has changed its accounting rules. Again.
The Department of Finance's Fiscal Monitor has been a useful tool in keeping track of the federal government's spending and revenues is a timely fashion. I've been using 12-month moving sums to account for seasonal patterns in revenues and spending, and they've been useful check to see if federal finances are consistent with budget projection. […]
Redefining “inflation”: Austrians, NGDP targets, and my mother
Some Austrians (I can't remember which ones) define "inflation" as "a growing supply of base money". [Update: Jonathan Finegold gently corrects me.] This used to strike me, as it strikes most economists, as a bit daft. OK, I would think, you can define "inflation" that way if you want, but "rising prices" is what the […]
Is this a bank bailout by the CMHC? Quotas vs tariffs.
I learn from the CBC that the Canadian Mortgage and Housing Corporation has imposed a quota of $350 million per month per individual bank (or other lender) on the amount of mortgage-backed securities it will guarantee. Presumably the CMHC did this because the Federal government wanted to put a cap of $85 billion on the […]
Value-added, externalities and eggs
This was written by U of Alberta's Andrew Leach. It originally appeared on his blog Rescuing the Frog. Today, what I initially thought was a mildly controversial statement about upstream vs. downstream profitability and value-added led to me finding myself with a little bit of egg on my face and also completely baffled about the way we […]
New taxes are usually inefficient or unpopular – and that’s a good thing.
My last post contained a diagram suggesting that no tax is both popular and efficient. On twitter, Matt Cowgill suggested the diagram was wrong. Taxes on resource rents are both popular and efficient. Michael Kushnir suggested carbon taxes as another possibility. If Cowgill and Kushnir are right, then the set of efficient taxes interesects the set of popular taxes:
A Brief Retrospective on the Public Sector
What better way to mark the eve of the Canadian Civic Holiday weekend than with a quick civically engaged overview of the growth of the public sector from a historical perspective. In his 2011 Governments versus Markets: The Changing Economic Role of the State, Vito Tanzi provides a table on general government expenditures as a […]
Worthwhile Canadian Initiative 
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