Author Archives: wciecon
Instrument rules, target rules, NGDP, complexity and learning
At one extreme you have pure discretion. The central bank does whatever it thinks is best. At the other extreme you have an instrument rule. The rule specifies exactly how the central bank should set the monetary policy instrument, conditional on the indicators (i.e. conditional on its information). The Taylor Rule is an example of […]
Worthwhile Sumnerian Initiative?
Spotted at Marginal Revolution - a proposal by Scott Sumner: Replace the corporate tax with a payroll tax of x% on everyone making more than $100,000/year. Have x% be the tax rate that replaces the lost corporate tax revenue. That would help the poor, it would help the middle class, and it would help the rich. […]
Could you pass Eco 100?
My best friend's son is taking Eco 100. While studying for his midterm exam, he encountered this question: True or false: There is no difference between these two equilibrium equations in Eco 100 consumer theory as one equation can be transformed mathematically into the other (a) MUx/MUy=Px/Py (b) MUx/Px=MUy/Py. What do you think? Is this […]
Seaways and Separatism
Like every Canadian my age, I was taught about the St Lawrence Seaway in school. But I never fully understood why it was built or how it worked. So, while in Montréal this past weekend, I decided to cycle the length of the Lachine Canal, and around to the Lachine Rapids (pictured on the right), to […]
Politics and Taxes
I wanted to weigh in on Stephen Gordon’s post on the Ontario HST reduction but found my entry in the comment box growing so here is a post instead. Why are the Conservatives and more to the point the NDP supporting what seems like a redistribution to higher incomes? Well, I think it comes down […]
The ECB’s internal contradictions
The Eurozone news is really depressing. I think things are going to be very bad very soon. I don't have much to say that I haven't already said in previous posts. But thought I would add this anyway, FWIW. The ECB doesn't like inflation uncertainty; it wants to keep inflation predictable and just below 2%. […]
No, we really don’t want to reduce inequality
A few weeks ago, Mike Moffatt wrote an op-ed that ran in the Ottawa Citizen and several other PostMedia papers to the effect that there simply isn't the will on the part of 99% of the population to do much about inequality: if there were, there'd be more popular support for the sort of tax-and-redistribution […]
Why isn’t NGDP targeting a lefty thing?
I don't have an answer to that question. The politics of NGDP targeting doesn't make any sense to me. I don't understand it at all.
Friedrich List: The Un-Adam Smith
Here is something a little different. My history of economic thought course has just finished up with John Stuart Mill and I will be moving into the socialist reaction to classical economic theory. Most of us probably associate Marx and socialism with criticism of the classical school but there was also an early non-socialist reaction […]
Soldiers of fortune, department chairs, and CEO pay
Assume ten identical young men. One of them is needed to do a dangerous job which creates disutility for the person doing it. Assume they have diminishing marginal utility of consumption. Assume (though a weaker assumption can get the same results) that the utility function is separable in consumption and the type of job. There […]
Worthwhile Canadian Initiative 
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