Author Archives: wciecon
Why can’t the Fed just buy yuan?
The title really says it all. And it's not a rhetorical question; I don't know the answer. But if the US is really concerned (H/T Mark Thoma) about the US dollar being too high against China's yuan, and it believes China is "artificially" preventing the yuan from appreciating against the dollar by foreign exchange market […]
Cheap talk and the exchange rate
Why does the Loonie appreciate when the Bank of Canada tightens monetary policy (relative to what was expected)? And depreciate when the Bank loosens monetary policy (relative to what was expected)? Before you conclude I've lost it, by asking such an easy question, consider the following weird thought-experiment.
Oil prices in currencies other than the USD
I've received a request to update my irregular series of graphs of movements in oil prices in currencies other than the USD. There's been a certain amount of movement in the oil and forex markets over the past few months, so I'm happy to oblige: The CAD and the euro have appreciated by about 20% […]
Economic illiteracy goes viral
It turns out that I may have been unfair to Patricia Croft (chief economist of RBC-whatever-it-is) over here. As Erin Weir points out, she's not the only high-profile professional economist to go from remarking on the relatively small quantity of Canada's official reserves to making the clanging error of concluding that the Bank of Canada's […]
Economic policy advice for the Liberals: A conversation with the Cheshire Cat
There are reports that the federal Liberals are going ahead with some sort of conference that is to generate some sort of intellectual infrastructure for an eventual platform for an election, to be held – if things continue to go according to current form – in 2012. So this seems to be as good a […]
The forex market is dumber than a sack of hammers
I've said it before, and I'm saying it again. The CAD is off by about two cents today: Canada is no Oz, mate: [W]hat seems to have caught currency markets off guard was the Bank of Canada’s commitment to keeping rates unchanged until at least next June and keeping its expected economic growth rate for […]
Hopefully the last post I’ll have to make on the Canada’s-housing-market-is-not-the-US-housing-market theme
The National Bank has a summary (pdf) of some numbers comparing how the Canadian housing market has behaved very differently from that in the US: [W]e compare the housing market correction in Canada with the one that occurred in the United States. The two have absolutely nothing in common. In Canada, the correction got under […]
Disinflation continues, and the case for intervening in the forex markets gets stronger
The September CPI report was published last Friday, and the disinflationary trend of the last few months hasn't yet stopped: As I noted at the last interest rate announcement, Up until the crash in commodity prices, Canada ran a current account surplus, so an appreciating currency made sense. But now that we're running a current […]
Why we need more Canadian academic economics bloggers
The economic story du jour is the appreciation of the CAD, and Peter Mansbridge had a panel of economists on The National last Tuesday to discuss it. I get the impression that this is a semi-regular recurring feature. The discussion was – how shall I put it? – unsatisfying.
Stephen Leacock on the benefits of economic stimulus
It has come to the attention of the federal Liberals that ridings who are represented by Conservatives are receiving a disproportionate share of the monies spent under the aegis of the fiscal stimulus: Ontario was allocated about $1.1 billion in Infrastructure Stimulus Fund money, translating to about $90 for each Ontarian (according to the 2006 […]
Worthwhile Canadian Initiative 
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