Monthly Archives: February 2015
Teaching, OLG models, and the phenomenology of perception
When we teach students economics, we sometimes use numerical examples to help them understand general principles. Sometimes we make them work through those numerical examples by themselves, as an assignment. It's the only way they will really get it, and see what's really going on. But once they get it, they don't need the numbers […]
Canadian Convergence
Mark Brown and Ryan MacDonald at Statistics Canada have just released a Research Paper on Canadian provincial convergence and divergence of per capita household disposable income from 1926 to 2011. They find that while there has been convergence over time, it has proceeded in fits and starts with periods of external shock such as the […]
Is Poloz Pulling down the Loonie?
Bank of Canada Governor Stephen Poloz insists he is not talking down the Canadian dollar and its depreciation relative to the US dollar is the result of economic developments – in particular the fall in oil prices. So is oil driving down the dollar? How about a quick and dirty regression?
How markets convert meat into vegetables
It is Winter. It is impossible to produce food, and the people can only eat the food they have already stored. The king wants to take food away from the carnivores and give it to the vegetarians. He orders a tax on the carnivores, so they will eat less food, and a transfer payment to […]
The census long form – A critical tool for better understanding and policy
The following was written by Russell Davidson, Charles Beach and Thomas Lemieux on behalf of the Canadian Economics Association. A condensed version appeared in Saturday's Globe and Mail. With a bill to reinstate the mandatory Census long form currently before Parliament, we wish to express our views, on behalf of the executive council of the Canadian Economics Association, on the […]
Fisher, Calvo, Ball and Mankiw, skewed bad news, and Divine Coincidence failures
My head is not clear on this, so this won't be a clear post. 1. Econometricians know of Ronald Fisher as a statistician, but he was also a biologist. I have not read Fisher, but this is how Jeremy Fox explained one of Fisher's ideas to me in comments on one of my old posts […]
Debt does have intergenerational distributional implications
Consider two possible worlds: World A: Us old people bequeath our government bonds to the next generation (as a freebie). World B: Us old people sell our government bonds to the next generation (they pay us for the bonds). See the difference? In world A the next generation inherits the tax liabilities inherent in the […]
Money as closed-end mutual fund
[I don't think this is very original, but it's a fun and instructive metaphor to play with. The most important lesson is the way the metaphor fails.] Suppose I start a closed-end mutual fund. (Brits call it an "investment trust".) I issue shares, and use the proceeds to buy assets like bonds and stocks. Shares […]
Instrument independence vs target independence under flexible exchange rates
Sebastian Edwards (HT Mark Thoma) says that monetary policy independence under flexible exchange rates is an illusion. This conflates instrument independence with target independence. Instrument independence is always an illusion, given the target. Target independence is not an illusion.
How to lie with NGDP statistics?
I'm not very good at this. But I think we need to ask the question. Others could answer it better than me. Scott Sumner tells me that Greece is considering issuing NGDP-linked bonds, where the amount the government pays to bondholders is proportional to Nominal Gross Domestic Product. Like Scott, I rather like the idea […]
Worthwhile Canadian Initiative 
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