Author Archives: wciecon
Why did the opposition parties let Stephen Harper outplay them so badly on Employment Insurance?
It appears that we will have some sort of modification to Employment Insurance. The main measure involves an extension of benefits to some EI recipients who may be at risk of exhausting their benefits, and that – and the prospect of an election – appears to be enough for the NDP and the Bloc. For […]
All Microeconomics gets Say’s/Walras’ Law wrong
It's not just John Cochrane; it's not just (modern) Chicago; it's (nearly) all of us. Which economist has not written, said, thought, taught, or learned, the following: "Let there be n goods (including money, if it exists). Max U(X1,X2,..Xn) subject to SUM over n[P(X-E)]=0. Aggregate over all people. Therefore the sum of the n excess […]
Quebec: An oasis of sanity in a desert of GST/HST silliness
The Charest government is floating the idea of increasing the QST – which has been harmonised with the GST since the very beginning – by another percentage point (in addition to the one-point increase announced in last spring's budget) as a way of dealing with the post-recession deficit. This is clearly the right thing to […]
Why does Senator Sharon Carstairs think that the Parliamentary Budget Office shouldn’t make its reports public?
Anyone? Kevin Milligan at Support the OPBO would like to know. So would I. The relevant legislation appears to be silent on the matter.
A “proof” of Say’s Law; and why money is weird
For a whole economy, does planned expenditure on newly-produced goods necessarily equal planned income from the sale of newly-produced goods? That's what I mean by "Say's Law" in this context. Say's Law is wrong, and the fact that it is wrong is really important for macroeconomics. But it's not obvious why Say's Law is wrong. […]
John Cochrane, Paul Krugman, and Say’s Law, again
Via Casey Mulligan and Karl Smith, here is John Cochrane's response to Paul Krugman. It's a very good response. But there is one part where John Cochrane is definitely wrong. It's small, but important. And it's all about Say's Law, and the crucial difference between a monetary exchange and a barter economy.
Is the Bank of Canada bluffing?
From today's interest rate announcement: Persistent strength in the Canadian dollar remains a risk to growth and to the return of inflation to target. In its conduct of monetary policy at low interest rates, the Bank retains considerable flexibility, consistent with the framework outlined in the April MPR. The Bank has been issuing warnings such […]
Long-term unemployment in Canada and the US
The more I look at the US, the more I see unpleasant parallels to Canada's experience of the 1990's – what Pierre Fortin called The Great Canadian Slump. Even after we emerged from the worst of the 1990-91 recession, we still had to deal with a large current account deficit, out-of-control government deficits and significant […]
“The most severe recession since the last one!” Or, how Canadian economic forecasters got it right
The August LFS release is out, so it's time to update my series of graphs comparing job losses in this recession with those of recessions past. And it's also time for Canadian economic forecasters to take a bow – their predictions for how the recession would proceed out turned out to be pretty much on […]
Who is increasing their spending – debtors or creditors?
That's the question we ought to be asking right now, but I haven't seen anyone ask it, let alone answer it. I don't know the answer, but I do know it's the right question to ask.
Worthwhile Canadian Initiative 
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