Author Archives: wciecon
A $10b deficit isn’t what it used to be
There are several reports to the effect that the federal govt may run a deficit on the order of $10b in FY 2009-10. When the deficit went to $10b back in 1977-78, it was 5% of GDP. Thirty years later, $10b is something like 0.6% of GDP. Let's all not panic, shall we?
On the causes of an eventual Canadian recession
I was planning on writing this post a bit later, but since several good points have already been made in the comments over here, I'm going to start a discussion on the mechanics of how the Canadian economy might go into recession in the next few months. The decline in exports to the US. About […]
Election markets are beyond silly
I'm going to indulge in a heaping helping of I Told You So: Trader drove up price of McCain 'stock' in online market: An internal investigation by the popular online market Intrade has revealed that an investor’s purchases prompted “unusual” price swings that boosted the prediction that Sen. John McCain will become president. Over the […]
So where were we?
Now that it's been decided who will form the government, it's time to look at the problems facing it and what it can and should do about them. The next few posts will be data-oriented, trying to provide some background. Today, I'm going to look at the state of the labour market. In the US, […]
Paulson, Brown and Harper
Nick Rowe asks why the Brown plan is better than the Paulson plan: The original Paulson plan was for the US government to buy assets from US banks. The Brown plan is for the UK government to buy equity in UK banks. The consensus among economists seems to be that the Brown plan is better […]
Canadian banks: The prodigal sons’ older brothers
Okay, so we're not supposed to be worrying about moral hazard any more. But that doesn't mean it's less annoying to watch your competitors screw up, get bailed out and scoop your business. Ottawa weighs new measures for banks: Ottawa is facing pressure to introduce further backstops for the Canadian banking system, following a series […]
Another reason to approve of Krugman’s Nobel prize
He knows the joke behind the title of this blog. When I realised the magnitude of the utter hopelessness of finding an interesting title for a blog on economics, written by a Canadian academic, I decided to go with irony. Update: Here's yet another. Paul Krugman points us to an autobiographical piece: Admittedly, there were […]
“If you can keep your head when all about you / Are losing theirs and blaming it on you”… you’ll lose the election
Consider two recent media feeding frenzies: Stéphane Dion admits that there might be circumstances in which an eventual Liberal government might run a deficit. Stephen Harper notes that "Canada is not the United States": there is no crisis of solvency in the Canadian financial system, and there's no evidence that one will occur anytime soon. […]
Real-time data, or why being an Irish macroeconometrician is a frustrating existence
I spent Friday and Saturday listening to these papers on dealing with 'real-time' data – that is, data that are actually available at a given point of time. The main question that people are grappling with is how to extract information from preliminary estimates that will be subsequently revised. As far as I can tell, […]
Why is buying US Treasuries considered a ‘flight to security’?
Let's consider: The adjective that best describes the US banking system is 'insolvent'. The government balance is horrible, and is about to become unspeakably horrible. The current account deficit is not quite as horrible as it once was, but it is still outside any normal country's comfort zone. So why would anyone seeking a safe […]
Worthwhile Canadian Initiative 
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