Author Archives: wciecon
Fences, Walls, Pillars and Banking
A government report out of the United Kingdom recommended that UK banks should “ring-fence” their retail banking divisions to protect them from riskier investment banking arms. The Independent Commission on Banking (ICB) calls for these changes to be implemented starting in 2019.
Ponzi and pensions
This post was written by Simon van Norden of HEC-Montréal. Since the Republican candidates’ debate, the debate about public pensions has heated up, partly because one of the front runners claims that US Social Security is a “Ponzi Scheme.” Now, that’s a clever choice of words, because most associate “Ponzi Scheme” with a fraud ( […]
The overlooked failure in pension markets
Public economics textbooks have lists of reasons why pension markets fail. People aren't aware of the need for for retirement savings, either because they're short sighted, or have limited cognitive abilities. Annuities markets fail, because only people who know they are likely will live a long time will choose to purchase annuities. Private markets may […]
Currency, interest, and redeemability
What makes a central bank special? The Bank of Canada can borrow and lend. So can the Bank of Montreal. So can I. Nothing special there. The Bank of Canada can set any rate of interest it likes when it lends. So can the Bank of Montreal. So can I. Nothing special there. "If you […]
Good and bad currency wars
Canadian Finance Minister Jim Flaherty is concerned that Switzerland's actions to depreciate the Swiss Franc against the Euro could lead to a currency war. But currency wars don't have to be bad; they could be good. It depends on how they are fought. If fought the right way, an invisible hand may lead to a […]
Employment and Political Regimes: Some Ontario Evidence
According to a recent Nanos poll conducted for the Globe and Mail, after health care, the economy/jobs is the top concern of Ontario voters this fall election. Ontario voters may be interested on how employment growth has fared in their particular neck of the woods under various political regimes.
A shotgun wedding for the United States of the Euro?
"Ummm, you know that Free Trade Agreement we signed with the US and Mexico, a while back? And you know we said NAFTA was just a free trade agreement — nothing more? Ummm, well, it turns out we were wrong. Because of NAFTA, if Canada, Mexico, and the US don't now join together into one […]
Ranking Employment Performance
It has been the conventional wisdom in Canada that we have weathered the Great Recession and the financial crisis much better than the rest of the world. Ever wonder why when government comparisons are made about how Canada fared during the Great Recession, the comparison made is inevitably with the G-7 countries?
Behavioural Economics and the Rationality Assumption in Economics
Inspired by The Price Is Too Damn High, Canadian Edition and Frances' post on behavioural economics. There is a temptation for non-economists to answer any question that puzzles economists by simply declaring "people are irrational!" "Why are prices so much higher in Canada?" "PEOPLE ARE IRRATIONAL!" "What explains the equity premium puzzle?" "PEOPLE ARE IRRATIONAL!" etc.
Why have double rooms in residence?
One of the little known differences between Canada and the U.K. is the design of university residence rooms. Rooms in British university residences are usually singles. Canadian universities typically have a mix, including a good number of double rooms, with the percentage of doubles varying from campus to campus. Students, typically, prefer singles to doubles. […]
Worthwhile Canadian Initiative 
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