Monthly Archives: June 2016
Central Bank Coordination as BS; Targets vs Instruments.
Imagine you are at an international policy conference. Someone says "Central Banks need to coordinate their monetary policies better". You nod your head wisely in agreement, along with everyone else. Because you know that what one central bank does affects not just its own economy but the economies of other central banks, so there are […]
Canada Pension Plan Memo
To: Generation X, Generation Y and Millennials From: The Baby Boomers Re: Pension Savings Date: June 21, 2016 It has come to our attention that you are not saving sufficiently for your retirement. This does not surprise us. We haven't saved sufficiently for our retirement either. Some of us have made enough money in the housing market […]
Wage Norm Function vs Stock Price Belief Function
Roger Farmer always has done interesting and different stuff. We need economists like that. But it's risky of course. What I'm trying to do here is articulate something that makes me uneasy about his recent line of macro theorising. Like his simple model here with Konstantin Platanov (pdf). Consider a simple model with three goods: […]
The Irrelevance of Universal Basic Income
The Modigliani Miller Theorem says that a firm's financing policy is irrelevant. It's wrong of course, but it's a good place to start thinking about firms' financing policies. It would be presumptuous to talk about an Irrelevance "Theorem" for Basic Income. The math is trivial, and the economics is obvious. (And I hope this is […]
The Law of Reflux vs Helicopter Money
Let me start out with an extreme (and very silly) assumption, just so I can explain something simply. Assume that the demand for currency does not depend on the price level, nor on real income, nor on interest rates, nor on anything. It's just fixed. Every individual wants to hold exactly $100 in currency, no […]
On Olivier Blanchard on ISLM and Teaching Intermediate Macro. And my despair.
I read Olivier Blanchard on how to change the ISLM model in response to the recent recession to teach Intermediate Macro better. And I despaired. Not because he says anything daft, but precisely because what he says seems so sensible a set of minor modifications. But it's a set of minor modifications that takes us […]
Bargaining power and the incidence of taxes on high earners in Canada
Today I'm presenting a paper at the meetings of the Canadian Economics Association: "Bargaining power and the incidence of taxes on high earners in Canada." The bottom line is that once you take into account the fact that high earners have bargaining power – that's why they are high earners in the first place! – […]
Worthwhile Canadian Initiative 
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