Author Archives: wciecon
New CIHI National Health Expenditure Numbers Out
The Canadian Institute for Health Information has released the latest version of its annual report on public and private health expenditure at both the provincial and federal levels. As always, the CIHI provides a wealth of health data and information resources and its site is an enormous asset to health researchers, health care administrators and […]
Understanding Banks and Two Monetary Policy Instruments
Sometimes I write posts about things I don't understand and want to understand. (Or don't understand very well and want to understand better.) This is one of those posts. Suppose the government nationalises all the commercial banks, and merges them into the Bank of Canada. And suppose the Bank of Canada abolishes paper currency. So […]
John Cochrane On Neo-Fisherianism, again
First I am going to give you the intuition behind the model in John Cochrane's new paper. It's a very good paper, though I confess I've only skimmed it, because it's very long, and I don't understand all the math. Then I'm going to explain what I think is wrong with it. Then I'm going […]
How to make mine operators pay for the mess they make
When an Ontario cemetery operator sells a burial plot, they must side aside 40 percent of the money they receive into a "care and maintenance account". This is a way of solving a grave moral hazard problem: operators might sell plots, and then walk away from their maintenance obligations. The same kind of moral hazard […]
Price Level vs Inflation Rate: semantic clarity
I write this for journalists, first year economics students, and the general (non-economist) public. Yes I'm being pedantic. But I hope it helps. I'm trying to clear up a very common confusion in how we talk about inflation. Your car has an odometer, which measures kilometers driven. And your car has a speedometer, which measures […]
From ISLM to NK Macro
Let me try it this way. This is written for macro students, and their teachers. But it's aimed at researchers too. It's about the role of money in macro models. Ignore what New Keynesian macroeconomists say about their own models. Listen to me instead. Start with the second-year textbook ISLM model. The price level P […]
Financial Assets > Liabilities
Take Bitcoin for example. It's a financial asset to whoever holds it. To whom is it a financial liability? I suppose you could say "it is a liability to the whole community of those who accept Bitcoin in exchange for goods". But that answer seems like a desperate attempt to salvage the assets=liabilities dogma. Nobody […]
Green Bitcoin vs Red=Green LETS: Nominal Anchor vs Needs of Trade
Both Bitcoin and LETS are monetary exchange systems. There are many differences between Bitcoin and LETS. I am going to ignore all of those differences except the one I want to focus on. Those other differences are off-topic. [Yes, this post is not really about Bitcoin vs LETS. I am just using Bitcoin and LETS […]
Why I=S is a bad place to start doing macro, again
I was reading Philip Cross's article "The Limits of Economic 'Stimulus': How monetary and fiscal policy have sown the seeds of the next crisis". I came to this bit in the Executive Summary: "Low interest rates also depress savings and therefore investment." It is clear from the context that he is talking about the Bank […]
Will legalization reduce youth marijuana use?
Rates of teen marijuana use in Canada are among the highest in the world. Legalization advocates blame high use on criminalization: "the ready availability from dealers with no scruples about targeting youth, and the cachet of forbidden fruit—or rather, buds." Indeed, the first objective of the Canadian federal government's marijuana legalization agenda is to "Protect young Canadians by […]
Worthwhile Canadian Initiative 
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