Author Archives: wciecon
In which I applaud the Nova Scotia budget
I don't follow what happens in Nova Scotia all that closely, but since the budget brought down by its new-ish NDP government reproduces the main features of the Quebec budget (of which I approved), it seems only fair to give credit where credit is due. To summarise: An increase in the HST by two percentage […]
Should Canadian investors go shopping in the US?
This piece caught my attention over the weekend: Here's why Canadian investors should go shopping in the US: U.S. stocks have been discounted, and with a strong Canadian dollar there are bargains to be had. Now, WCI is most definitely not the place you turn to for financial advice, but there are some things going […]
The Value of the Canadian Dollar in 2009-2010, Oil Prices and Interest Rates
About a decade ago when I was giving econometrics tutorials at the University of Rochester I asked my students to calculate the correlation between oil prices and the value of the Canadian dollar relative to greenback. Out of that was born MERT – my toy exchange rate predictor.
Celebrating pointlessness: minimum wage edition
The minimum wage in Ontario went up today, and Jim Stanford thinks that it's cause for celebration. I'm not sure why. I'm guessing that he – as does the editorial board of the Toronto Star – believes that a higher minimum wage will help reduce poverty. Sadly, this belief is mistaken. As I noted earlier […]
The Quebec budget: Will good economics be good politics?
The media are reporting that economists are singing the praises of the Quebec budget, and if asked, I'd add my voice to that chorus. This is the work of adults who take their responsibilities seriously, and the Charest government is to be congratulated for finally paying attention to what economists have been telling successive governments […]
The optimal size of government is a partisan issue. The optimal tax mix isn’t.
There are so many misconceptions about tax policy and the size of government that it's almost impossible to sort through them all. But I'm going to do the best I can.
My weekend with Liberals and Thinkers
I don't have much in the way of a comprehensive narrative for how the Canada 150 conference went, or what its implications are. My live blogging post is here, and my general impressions are below the fold.
The supply and demand for bubbles (in pictures)
I have drawn a picture of the supply and demand for bubbles. I think this picture might make it easier to understand what I was saying in my previous post on the need for a bubble. If the natural rate of interest, in an economy without a bubble, is below the growth rate of the […]
A Lucas Critique of monetary policy as interest rates
"The statistical relation between inflation and unemployment will not be invariant to the monetary policy regime". Economists will recognise that statement as an example of the Lucas Critique. They know it has implications for any policy that uses inflation to target unemployment. "The statistical relation between interest rates and inflation will not be invariant to […]
Productivity, the Canadian Dollar and Small Business – A Case Study
Based on a true story one of my clients had to deal with (besides teaching at Ivey, I am a consultant to the chemical industry). The following case explains why there could be, at least in theory, a relationship between productivity levels and fluctuations in the Canadian dollar. Consider a small company in Brampton that […]
Worthwhile Canadian Initiative 
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