Author Archives: wciecon
One useful insight from Austrian business cycle theory
I am not an Austrian, but… Three decades ago (ouch!) I made a valiant effort to understand Austrian business cycle theory. I failed. I wanted to believe it, because I found the existing theories (Old Keynesian or New Classical) unsatisfactory. But I couldn't get it to make sense.
The changing game between monetary and fiscal authorities
Who's in charge of aggregate demand? Monetary policy affects aggregate demand; fiscal policy affects aggregate demand. How the monetary authority acts may depend on how it expects the fiscal authority to act, and vice versa. What happens depends on the rules of the game they are playing. The rules of the game have changed in […]
Loanable Funds and Liquidity Preference; DeLong vs. Fama
This is a (probably hopeless) attempt to clarify the debate between Brad DeLong and Eugene Fama over whether an increase in government spending, financed by borrowing, will increase aggregate demand. There's something important that's missing from the debate: the rate of interest; and money.
Employment in the current and in previous recessions
Alex Tabarrok at Marginal Revolution has posted a graph comparing the decline in US employment during the current recession with what happened in the past, and Menzie Chinn at Econbrowser has offered a similar graph for industrial production. At first glance, these graphs seem comforting: the current experience seems to be following a moderate course, […]
A request for some Bayesian assistance
Calling all Bayesians! I need your help on two questions: first I want you to check something I said; second I want you to check something that Bryan Caplan said. In September 2008, Bryan Caplan issued a challenge (revisited yesterday) for people to say in advance how they would update their prior belief that the […]
Pump-priming and the Keynesian Laffer curve
Update: since what I thought was my most controversial post ever has drawn precisely zero comments, let me re-title it: "A fiscal stimulus can more than pay for itself". The English language is full of dead or dying technological metaphors. How many people have ever primed a pump or kick-started a motorcycle? (I'm old enough […]
Probably not the best stimulus proposal I’ve seen so far
The Quebec government released an economic statement thingy (pdf) today, announcing six measures to counter the recession. Here is number five: [W]e are acting on our commitment to raise the minimum wage to protect thepurchasing power of low-wage workers. The minimum wage will be raised by 50cents an hour next May 1, bringing it to […]
The (economic) benefits of civility
I can think of three benefits from people being civil, in arguments about economics (for example).
What do do with the $1.95/vote subsidy: Give it to the Parliamentary Budget Office
We all know that the Harper government's proposal to kill the the $1.95/vote subsidy for the federal political parties blew up in its face. But would it have been good policy? Andrew Coyne thinks so, and it's hard to see just what public policy goal is being served by giving public money to political parties. […]
Why can’t Ann get a credit card? A sample of one.
Ann's not her real name, but she's a real person, and she can't get a credit card. Is this normal, or part of the credit tightening reported on the Bank of Canada's latest Senior Loan Officer Survey? That's not a rhetorical question. I don't know the answer, and wondered if any reader did. Details below […]
Worthwhile Canadian Initiative 
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