Author Archives: wciecon
Tâtonnement in the market for immigrants
Today, Greg Mankiw quotes from Larry Lindsey: Unlike some nations–Canada, for example–we do not "sell" residency to people who promise to bring in investment money and create jobs. As economists would say, if you’re not going to ration by price, you’re going to ration by queue. and asks: Why not ration by price? As noted […]
The Bank of Canada’s job gets tougher
By any standard, the Bank of Canada has handled things very well over the past decade: inflation is low and stable, and employment rates have been at all-time highs over the past couple of years. But things are starting to get more complicated.
Even more evidence that people respond to incentives
A few years ago, Human Resources Development Canada (HDRC) ran an experimental project to see how single parents on welfare responded to changes in their budget constraint. It has long been known that single mothers on social assistance are particularly vulnerable to the welfare trap: not only are their payments clawed back as they earn […]
Canada’s manufacturing sector does not have Dutch disease
Thanks largely to increases in the value of oil exports, the Canadian dollar has appreciated by 40% against the USD since the beginning of 2002. So you’d think that our manufacturing sector would be getting hammered, right? After all, that’s the classic Dutch disease scenario: the high demand for natural resource exports drives up the […]
Report from Committee 7
The newly-elected Parliament has begun its first session, and the first couple of days have been taken up with the usual rituals: the election of the Speaker of the House of Commons, the Gentleman Usher of the Black Rod, the Speech from the Throne, and the use of Any Number of Capitalised Words to Describe […]
Yield curve and uncovered interest rate parity update
As a follow-up to this post, here are the US and Canadian yield curves from March 2006 and December 2005. The slopes haven’t changed much, but the US curve has shifted up at a faster rate than the Canadian yield curve. This is part of a trend that goes back at least 12 months: The […]
Encouraging news on income and wages
From today’s StatsCan Daily: Canadian families with two or more people had an estimated median income after taxes of $54,100 [in 2004], up about 2% from 2003 in real terms after adjusting for inflation. and Statistics Canada’s low-income rate measures the percentage of families below the low-income cutoff (LICO). The LICO is a statistical measure […]
Economic growth and convergence
One of the main predictions of standard neoclassical growth models is convergence. If there are diminishing returns to capital, countries that have relatively higher levels of capital will have lower rates of return on investment than will countries in which capital is relatively scarce. Since poor countries offer higher rates of return on investment, they […]
Waiting for the pass-through
There are two list prices of my copy of Freakonomics: $C 34.95 and $US 25.95. Yesterday’s closing CAD-USD exchange rate was 0.8642. This means that that if you had $C 30,000 handy, you could exchange that for $US 26,000, drive across the border, buy 1000 copies of Freakonomics, cross back again and sell them for […]
Tuition: Ontario goes in the right direction
Yesterday, the Ontario government announced that it would lift the freeze on tuition fees that it had imposed two years ago, and that it would expand its program of aid for students from low-income households. Student debt is an important issue, but it doesn’t affect all students: only about half of those who graduate with […]
Worthwhile Canadian Initiative 
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