Monthly Archives: February 2015
Babies as Human Capital in an OLG model
I'm trolling Elizabeth Breunig. Because she said that "Human capital is one of the more odious terms in the capitalist lexicon". And I like the term "human capital", because I think it helps us think more clearly about investment in training and education. Are new-born babies "human capital"? My first thought was that they possess […]
The Fuss Over TFSAs
Well, there seems to be a fair amount of fuss over the proposed doubling of the contribution limit to Tax Free Savings Accounts(TFSAs). Kevin Milligan says the case for raising the annual TFSA limit is shaky as the benefit will be mostly to high wealth households rather than those at the middle or bottom of […]
Steve Poloz on inflation targeting
Stephen Poloz is Governor of the Bank of Canada. Here is the speech he delivered at Western. The whole thing is worth reading. Perhaps I'm reading too much into it. But I see a tension in Steve's speech. He recognises that Divine Coincidence has failed, and that inflation targeting has failed. But he doesn't want […]
Does capital income exist?
[Ages ago, as a graduate student, I "wasted" my time (when I should have been finishing my thesis) reading capital theory, including the more "heterodox" stuff. My memory is pretty hazy, but I still think about the old questions occasionally. There's nothing really new here for economists familiar with "dated goods".] 1. Suppose I know […]
Ours the task eternal — investing in human capital
That's the motto of Carleton University, where I work. Carleton's task, and my task, and the students' task, is to produce educated students. It takes a lot of resources to do this: my time, the students' time, the support staff's time, plus the use of buildings and land, and hydro. All those resources could be […]
Do the Greeks need Greek banks?
Or could they all use foreign banks? Dumb question. I don't know the answer. Are there some laws that make it hard to use foreign banks? Tourists seem to manage OK without opening a foreign bank account. It ought to be easier still if the foreign country uses the same currency. Could the foreign banks […]
Keynesian Cross as simultaneous moves symmetric Nash equilibrium
Let there be two players. The apple producer buys bananas from the banana producer; and the banana producer buys apples from the apple producer. Each must place his order for how much fruit he wants to buy before observing the other's order. Each player's action depends on his expectation of the other player's action. The […]
Fixed exchange rates and Blame Thy Neighbour
There is a parallel universe in which the Euro was never invented, and the Eurozone countries kept their own moneys and their own central banks, with flexible exchange rates. I think the economic outcomes would have been better. But let's just suppose they weren't. Suppose that each of those independent central banks had screwed up […]
Do economically illiterate slobs use duality theory?
Dunno. I was never that good at micro/math. That's why I'm asking. The government has a banana machine that converts any number of apples into the same number of bananas. If it starts the machine up we get a new equilibrium, where people will produce more apples and fewer bananas, and/or consume fewer apples and […]
“Human Capital” and “Land Capital”
Branko Milanovic (HT Mark Thoma) misses the point about the usefulness of the concept "human capital". To explain the point, let me talk about "land capital" instead. Raw land, in it's natural state, often isn't very productive. Before you can grow wheat on it, you usually need to clear it, or drain it, or fertilise […]
Worthwhile Canadian Initiative 
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