Monthly Archives: January 2014
Coloured sunspots and shells
This post is a sketch of a model of secular stagnation; and of bubbles that burst and get replaced by different bubbles. I don't formalise the model mathematically, because I don't have a comparative (or absolute) advantage at that sort of thing. But I think it could be formalised fairly easily. Start with a model […]
Economic Inequality, Saving and Economic Growth
“It is generally recognized that more saving takes place in communities in which the distribution of wealth is uneven than in those in which it approaches more closely to modern conceptions of what is just.” T.S. Ashton (1948) The Industrial Revolution 1760-1830, p. 7. I came across this quote while reading Ashton’s account of the […]
“Is the falling exchange rate good news or bad news?”
I was on CBC radio yesterday morning for about 5 minutes, talking about the exchange rate. From this experience, and from previous similar experiences, this is what reporters want to ask: "Who gains, and who loses, from the fall in the exchange rate? For Canada as a whole, is the fall in the exchange rate […]
One good thing about Bitcoin
Is that it is (sometimes) used as a medium of exchange but is not (yet) used as a medium of account. (Is that right?) Quite probably, someone else has already said this, but just in case they haven't:
A Lower Dollar Won’t Reverse Manufacturing’s Decline
The decline in the value of the Canadian dollar relative to the US dollar is expected to provide a boost to the manufacturing sector. There is certainly no shortage of commentary on whether the fall in the dollar is the result of economic fundamentals or an engineered conspiracy designed to boost Conservative re-election prospects in […]
Statistics Canada’s Attention Deficit Disorder
This happens all the time: With the release of November 2013 data, Statistics Canada converted the Industrial Product Price Index (IPPI) and the Raw Materials Price Index (RMPI) series to 2010=100, with 2010 as the base year. These indexes have also been updated using a weighting pattern based on the 2010 production values of Canadian manufacturers. At the same time, the classification […]
Another weird monetary world
Imagine you lived in a world where the central bank issued two types of money: paper money; and electronic money. If you want to pay for something with the paper money, you have to physically transfer it. If you want to pay for something with the electronic money, you just need to tell the central […]
Is the macroeconomic importance of finance an artefact of current monetary policy?
Suppose the Bank of Canada pegged the price of gold. If an increased demand for gold caused a recession, would macroeconomists be told they needed to pay more attention to the theory of the demand for gold? Or would the Bank of Canada be told to change its policy? Suppose the Bank of Canada pegged […]
Foreign Remittances, Immigration and Economic Development
In Europe, immigrants from developing countries come in to work and then often send back money to families. There are also alot of foreign workers in the higher income countries in Asia and the Middle East. According to a World Bank Report, the developing world is expected to receive $414 billion in migrant remittances in […]
CMHC reserves revisited
There are two questions that Canadian taxpayers need to ask about the Canadian Mortgage and Housing Corporation: 1. Are CMHC fees for mortgage insurance high enough? 2. Does CMHC have a big enough reserve against potential losses?
Worthwhile Canadian Initiative 
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