Monthly Archives: April 2016
Fewer Fiscal Multipliers and more Clarity from the Bank of Canada
At the risk of being thought "cavalier", I don't like what Bank of Canada governor Stephen Poloz is reported as saying by Kevin Carmichael. Inflation targeting is supposed to be inflation forecast targeting. The Bank of Canada is supposed to do what is needed to ensure that its own internal forecast of future inflation (at […]
Fiscal Balance and Unemployment
As we all know, Canada will be running deficits well into the foreseeable future. Based on the figures from the 2016 Federal Budget, as a percentage of GDP Canada will see its deficit go from a surplus of 0.1% in 2014 to -1.5% in 2016 and then will range from a low of -0.6 percent […]
Neo-Fisherian Microfoundations, with non-binding price ceiling and floor
Update: Here's a picture: Original post follows:
On Central Bank Lending to Government
The central bank prints money, lends it to the government, and the government sooner or later spends it (or uses it to cut taxes or increase transfer payments). There seem to me to be two views on this question that are equally daft: The Orthodox Daft View: "Central bank lending to government is a Bad […]
Two Problems with Designing a Basic Income Experiment
WARNING: I don't do (micro) Public Finance. And I don't do experimental economics. Those who have read the literature may tell me they are well aware of these problems, or that I'm wrong about something. Suppose someone asked me to design an experiment to test whether Basic Income would be a Good thing. (They wouldn't […]
Helicopter Bonds as Qualitative Easing
Accounting can be fun. Helicopter Bonds is when the government prints some bonds and drops them out of a helicopter, so whoever picks up the bonds now owns them. It's identical to a bond-financed lump-sum transfer payment. It's identical to a bond-financed lump-sum tax cut (because only net taxes=taxes-transfers matter). The government borrows money from […]
Helicopter Money is Permanent
The shocks in a random walk process are permanent. That does not mean it is impossible for a positive shock to be followed by a negative shock. It does mean it is equally likely that a positive shock will be followed by a positive shock as by a negative shock. That's what I mean by […]
The Neo-Fisherian Counterfeiter
Just a thought-experiment that's been running through my head. You are a saver and lender. You take some of the money you have earned as income, that you don't want to spend yourself, and lend it to people who want to borrow so they can spend it instead of you. Suppose you want to lend […]
Worthwhile Canadian Initiative 
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