Monthly Archives: October 2013
On “letting the market set interest rates”
Most people who say "interest rates should be set by the market and not by government-owned central banks" are confused. But not all who say that are confused. People who want the government to get out of the money business altogether, and de-nationalise money and central banking, are not confused. They might be right or […]
Why do people put stuff that isn’t recyclable into the recycling bin?
In Ottawa, plastic and glass recyclables go into a "blue bin", and are picked up once every two weeks as part of the regular household garbage collection. Styrofoam is not recyclable. It has never been recyclable. The instructions on the City of Ottawa website are clear: place these items in your regular garbage. It's not like […]
The Health Care Cost Curve: Bending if Necessary but not Necessarily Bending?
The Canadian Institute for Health Information (CIHI) has put out their 2013 National Health Expenditure Report and the big story seems to be that the numbers show that public sector health care costs in Canada are declining. Real per capita public sector health care spending (in 1997 dollars and I used the Health Care Implicit […]
Asset prices and the retirement revolution
Sometimes I have to remind myself that the sort of short run macro I do doesn't really matter much. Things like the recent global recession don't make much difference in the big scheme of things. So I'm writing this as an antidote to my own narrow perspective. Or, maybe I'm just a typical boomer seeing […]
Depository vs non-depository financial institutions?
Today's dumb question(s) from teaching monetary and financial institutions: 1. What is the difference between a "depository" and a "non-depository" financial institution? 2. Why is that difference economically important?
The hollowing-out of the middle class: It’s a guy thing
I've been having a hard time getting my head around the 'hollowing out of the middle class' theme that were seeing so much of. What, exactly, does that mean? And is it actually happening? In a Maclean's post a couple of months ago, I tried looking at it in terms of the proportion of the […]
Immaculate transfers and the monetary transmission mechanism
Assume that corn is identical across all countries, and is freely traded with zero transportation costs. We then know that "the law of one price" will hold for corn. The price of corn in Canada will be the same as the price of corn in the rest of the world. Why? Suppose it weren't. First […]
The best cure for “easy money” is easier monetary policy
Reading Bank of Canada Monetary Policy Reports doesn't normally annoy me, but reading this latest one did. Specifically, this bit: "Although the Bank considers the risks around its projected inflation path to be balanced, the fact that inflation has been persistently below target means that downside risks to inflation assume increasing importance. However, the Bank […]
Some introductory behavioural economics notes
Last night I gave a brief talk on behavioural economics to the Carleton economics student societies. The slides are here: Download Behavioural_econ_talk.
Random thoughts on house prices
First random thought: a person who was very ignorant about future house prices would nevertheless be almost certain that real (inflation-adjusted) house prices will be lower than today at some time in the future. If we want a null hypothesis about house prices, I think the best null hypothesis would be that the log of […]
Worthwhile Canadian Initiative 
Recent Comments