Monthly Archives: September 2013
Revolution, Income and Regional Decline: The American Revolution and the First American Great Depression
Using the framework of neoclassical institutional economics, new institutions are innovated if the perceived expected net gains are positive. That is, the benefits from the change should exceed the implementation costs plus the net benefits of the existing institutional arrangement. A primary ingredient of those gains must invariably translate into higher per capita income. As […]
Bertrand, Cournot, and the Simple Money Game
I'm writing this post mostly to try to get my own head straight. Read at your own risk. Strategy space matters. The order of moves matters. What I call "the Simple Money Game" is a three-stage mixed Bertrand-Cournot general equilibrium game. Bertrand moves are made before Cournot moves. Each player is both a producer of […]
MOE vs MOA: the battle of the paintings
I used to think that whoever controlled production of the Medium of Account controlled the price level. Now I think that's wrong. Unless the Medium of Account is also the Medium of Exchange. In an economy with a single MOA, and with n goods, there are only n-1 prices. (And in an economy with a […]
Higher Education Financing Takes Two to Tango
Alex Usher of Higher Education Strategy Associates has spent the last week on his blog going through an analysis of the financing of Canadian universities. His final post on the subject today provides a convenient summary showing that while total dollars per student has grown substantially over time, the academic operating side of the university […]
Thoughts on teaching “The Time Value of Money”
Strangely, because I've always been a macro/money guy, and have been teaching economics for 30+ years, I'm currently teaching the intermediate-level "Monetary and Financial Institutions" (aka "Money and Banking") course for the first time ever. (20 years ago I did teach a crash course in Finance to Marxist-trained Cubans, which was fun, and forced me […]
The Historical Constants of Affluence
According to the recently released results of the National Household Survey, the top 1% of Canadians aged 15 and over earn $191,000 a year and tend to be predominantly male, university educated, married, most likely over the age of 45, and live in larger metropolitan centers. It would appear that little has changed since the […]
New Keynesians just assume full employment without even realising it
And anyone with even an ounce of Old Keynesian blood left in his veins, if they understood what the New Keynesians are doing, would be screaming blue murder that we are teaching this New Keynesian model to our students as the main macro model, and that central banks are using this model to set monetary […]
Real wages and old-time macroeconomics
I posted this graph at Maclean's earlier today: The hook of the piece was that Canadian real wages had increased in Canada, and I made the point that this increase was largely due to the Bank of Canada's undershooting its inflation target. I went to the FRED site and put together a similar graph, using […]
Old and New Keynesians and self-equilibration
As I have argued before: "Does the macroeconomy self-equilibrate?" is a stupid question, because the answer depends on the monetary policy being followed. Your answer also depends on your model of the economy. And that's what I want to look at here. "Compare and contrast Old Keynesian and New Keynesian views on whether the economy […]
The Dead Grandmother Syndrome Reconsidered
Students don't question professors who miss office hours because of sick children or aging parents. So why are professors so untrusting of students who claim to have a sick or dying grandparent? Every stage in life has its joys and sorrows. A typical university student is around 20 years old. His or her grandparents will […]
Worthwhile Canadian Initiative 
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