Author Archives: wciecon
Two types of liquidity “shortage”
If I said that the recent recession was caused by a shortage of liquidity, most people would say I was mad. "Look how easy it is to get a loan, at such low interest rates!" In hyperinflations, the price of liquidity is extremely high. If the price level is doubling daily, then currency pays a […]
Countries as clubs: open borders and debt/GDP ratios
Don't think of a country as an area of land. Think of a country as a club, to which a group of people belong. Nomadic tribes were not attached to any particular area of land. Settled agriculture on scarce land is a recent and contingent fact. Clubs provide club goods to their members. Club goods […]
Labour market flows revisited
It's been a while since I've looked at patterns in gross labour market flows; the last time was here. The basic methodology is taken from Stephen Tapp's CJE article, in which he extracts labour market transitions from the Labour Force Survey Public Use Microdata Files. Not all transitions are covered by the LFS questionnaire, but […]
Fiscal offset of silly QE
This is (primarily) for Brits. 1. Suppose I normally buy 10 apples at $1 each. Then the government taxes me $3, buys 3 apples, and gives me those 3 apples. I will now buy 7 apples instead of 10. The net result on my consumption of apples, and everything else, is zero. The only difference […]
The equivalence between national debt and transferable monopoly rights
I got this idea from reading a Matt Rognlie comment on a previous post. (But Matt may or may not agree with what I say here). A. Suppose the government sells bonds, and finances those bonds by imposing a 10% sales tax on (say) milk. B. Suppose the government sells transferable milk quotas, and sells […]
Twitter and the Federal Election: A Last Update
Well, there is just over a week to go until Canada’s federal election and I finally managed to put together another update of the leader Twitter follower numbers I first began looking at with my August 13th post and then August 29th and September 19th. It has been a long election campaign and the final […]
Inflation in Lake Wobegone
In Lake Wobegone there are 1+n firms. The first firm raises or lowers its price by a mean-zero random amount, e. The remaining n identical firms wait to see what the first firm has done, then raise their prices by B times the average expected inflation rate, or lower their prices by B times the […]
Could increasing monopoly power explain declining interest rates?
Suppose that monopoly power (as measured by the markup of price over marginal cost) has been increasing over time. What effect would that increase in monopoly power have on the equilibrium (real) rate of interest? TL:DR the sign is right, but the magnitude looks far too small.
Dumb questions about predictability of stock market returns
Something I always wondered about, but was too scared to ask. Noah Smith's (quite reasonable) post nudges me into asking it. Even if everyone is perfectly rational, where is it written that stock market returns cannot be predictable? The stock market rate of return is a rate of interest. Where is it written that changes in […]
Is it ethical to sell complimentary copies of textbooks?
Faculty Books Recycling is a company that takes the complimentary copies of textbooks that publishers send professors, resells those comp copies to students, and makes a profit on the transaction. Faculty Books does everything possible to make professors feel that selling – or giving away – comp copies is an ethical thing to do. In […]
Worthwhile Canadian Initiative 
Recent Comments