Author Archives: wciecon
Worthless Canadian Reaction?
What else can you call it, when two large Canadian labour unions call for a Buy Canadian provision in government spending? Embarrassing? Shameful? Perhaps "imprudent" might be the best word, given Canada's reliance on foreign trade.
Why do journalists even try to explain forex fluctuations?
This is just silly: The Canadian dollar took a beating on currency markets Tuesday and stock markets tumbled amid investor disappointment in the U.S. government's financial rescue package. The currency closed down 1.97 cents (U.S.) to 80.24 cents after going as low as 80.04 cents as investors dumped a wide variety of currencies and bought […]
Average debt in Lake Wobegon
In Lake Wobegon, all the children are above average height. And the average household has $100,000 debt. Both those sentences are wrong in exactly the same way.
Markets in everything: Eternal salvation edition
Heaven updates its price list.
In which a US magazine summarises many points with which Canadians should be more familiar
Newsweek Okay, yes, I found this during a google search for this blog's title.
Why forecasters are predicting a short Canadian recession
As I noted here, pretty much everyone who has had the temerity to publish a forecast for the Canadian economy for 2009 is expecting a turning point in 2009Q2 or 2009Q3. In this post, I'm going to try to piece together the narrative behind this story. I'll be borrowing heavily from Calculated Risk: if you're […]
What if both Greenspan and his critics were right?
In 2003, Alan Greenspan argued that the Fed needed to set low interest rates to prevent falling into a liquidity trap and deflationary spiral. (H/T commenter Declan). In 2008, Greenspan's critics argue that those same low interest rates caused an asset bubble, which burst, causing the economy to fall into a liquidity trap and deflationary […]
Employment sticks to the script
Unfortunately, we're at the scary part. Here's what has happened to employment during the first three months of the recession, compared to previous recessions.
IS, LM, and two wedges: understanding the second wedge
A simple macroeconomic model of the current situation is the ISLM with two wedges. The first wedge between the IS and LM curves is the gap between nominal and real interest rates. The second wedge between the IS and LM curves is the gap between government and private interest rates. We add (or subtract) the […]
Stiglitz on inflation targeting: A Canadian perspective
I don't understand this. Davos Man's Depression: The so-called “efficient markets” model, which holds that prices fully and efficiently reflect all available information, also came in for a trashing. So did inflation targeting: the excessive focus on inflation had diverted attention from the more fundamental question of financial stability. Central bankers’ belief that controlling inflation […]
Worthwhile Canadian Initiative 
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