Author Archives: wciecon
Firm Currency Exposure – Moving Beyond Transactional
Not a week goes by when we read a story in the media on how a high and rising Canadian dollar affects exporters. (See: Get ready for a $1.15 loonie) The story is typically one of transactional exposure – a company has a revenue stream in U.S. dollars and the value of that stream is reduced […]
Pictures of Ireland?
In countries like Ireland, there is currently an abnormally large Gap between nominal interest rates and the expected growth rate of nominal GDP. That Gap creates a nasty positive feedback loop, through two channels: The Risk Channel. It's hard to pay down debt when the debt is compounding a lot faster than the growth in […]
A 21st century misery index
The 20th century misery index was the unemployment rate plus the inflation rate. In 1982, Canada's inflation rate stood at 10.9 percent,while unemployment was at 11.0 percent, for a 21.9 percent misery index. 2009, with inflation of 0.3 percent and unemployment of 8.3 percent, didn't even come close by old-style misery index measures. Yet, as […]
Worthwhile D.I.Y. Macroeconomics?
The New York Times has just published its 2010 "Year in Ideas" issue. One of the trends it identifies: D.I.Y. Macroeconomics. The financial crisis plus the growing availability of on-line data has given rise to "growing army of knowledgeable 'econo-bloggers'." I agree with one of their conclusions: econo-bloggers "offer sophisticated interpretations of economic data […]
But you try and tell the young people of today that… and they won’t believe ya
I've noticed a couple of recent media stories on the plight of youth ([1],[2]), and I have to say that I've seen worse.
The case against the penny
Mike Moffatt delivers the coup de grâce for the penny in today's Ottawa Citizen. Go read it. Tell your friends to read it. Tell your MP to read it.
The arithmetic of household debt
The interest rate on your mortgage is three percent. If the interest rate increases one percentage point, the interest component of your monthly mortgage payments will increase by approximately: a. 1 percent b. 10 percent c. 25 percent d. 33 percent e. None of the above.
Expectational Wicksell
I'm optimistic about US recovery. If I'm reading the signs right, the market is also optimistic about US recovery. But that's not what makes me optimistic. Again, if I'm reading the signs right, the market is more optimistic about US recovery than the Fed is. And the market believes it is more optimistic about US […]
Starbucks Bucks
What do you do when you're stuck in an airport with 15 pounds or 20 euros of local currency? It's not worth paying foreign exchange fees on such a small sum. It's not enough money to buy whisky at Heathrow. So I generally take it home and put it aside for the next journey – […]
Money, Barter, and Recalculation. A response to Arnold Kling.
Arnold Kling has a good "rant against monetarism", triggered by my saying "My position is that a general glut can *only* be caused by an excess demand for the medium of exchange." Arnold's response: "Most economists believe this, or something like it. I used to believe it, or something like it. I think that it […]
Worthwhile Canadian Initiative 
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