Monthly Archives: May 2016
Accounting for central bank profits
Just a simple "teaching" post. There are two different ways of thinking about central bank profits (of doing the accounting). A simple numerical example will illustrate the difference. Assume 2% inflation, and 1% real GDP growth, so Nominal GDP grows at 3%. Assume the stock of currency is 5% of annual NGDP. Assume the nominal […]
Helicopter Money is small beer, and normal
Let's do a back-of-the-envelope calculation. Assume a 5% currency/Nominal GDP ratio. Assume the government/central bank wants to use helicopter money to permanently raise the level of NGDP by 5% above what it would otherwise be. So the stock of currency will be permanently higher by 0.25% of NGDP. And assume currency pays 0% interest, so […]
Health Spending Numbers: An Update on the Long-Term
It is of course useful from time to time to take a look at the longer-term picture when it comes to health spending especially given that there is a slowdown in health expenditure growth. Figure 1 plots per capita total health expenditure in US PPP dollars from 1960 to 2014 for Canada (to 2014) and […]
The challenge: Find an example where ethnicity or culture matters in regulatory policy
Today I was asked by a government policy analyst: "I'm trying to think of an example of a situation when ethnicity or culture matters in regulatory policy. Can you help me out?" Here's my best attempt. I challenge others to try to come up with a better example. The regulation: In Canada, Vitamin D must […]
Gender-Based Analysis: A Guide for Economists
GBA+ [Gender-Based Analysis plus] is an analytical tool used to assess the potential impacts of policies, programs, services, and other initiatives on diverse groups of women and men, taking into account gender and other identity factors. The "plus" in the name highlights that GBA+ goes beyond gender, and includes the examination of a range of other […]
Democratic Helicopter Money and the non-observance of two counterfactual conditionals
I give my kids $100 and tell them to spend it not save it. 1. How can I tell whether my kids have really spent $100 more than they otherwise would have spent? Maybe they would have spent $100 anyway. 2. How can my kids tell whether I have really given them $100 more than […]
Adding more periods to the Diamond Dybvig Model; fear of illiquidity not insolvency
David Andolfatto has a very good post on "Monetary Policy Implications of Blockchain Technology". In passing (it's not a central point of his post), David says: "However, it's worth pointing out that the leading economic theory of bank sector fragility, the Diamond and Dybvig model, does not rely on the existence of opacity in the financial […]
Worthwhile Canadian Initiative 
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