Author Archives: wciecon
Making Change?
Alex Usher at Higher Education Strategy Associates had a great post on his One Thought Blog today dealing with policy-making and change. His comparison to policy-making in Ottawa as a slow stately moving river compared to Washington's high-pressure ice jam was pretty entertaining – he only left out that parts of the policy making river […]
Good shocks, bad shocks, and shocks that cause a monetary coordination failure
Just because a shock is a bad shock doesn't mean it should cause a recession. A recession is a monetary coordination failure. Monetary coordination failures are caused by monetary policy. Start with a Robinson Crusoe economy. By assumption, Robinson Crusoe always allocates his resources perfectly to maximise his expected utility given his information about the […]
Why did (Canadian) inflation-targeting work in 1996 but fail in 2008?
In both 1996 and 2008 the Canadian economy was hit with a big shock. The 1996 shock was the change in fiscal policy, turning a large deficit into a large surplus. The 2008 shock was the global financial crisis. (Canada didn't really have much of a financial crisis; no banks failed, as usual.) In both […]
The efficiency wage case for maximum wage laws
I think Larry Summers is wrong, on a point of theory. He commits a fallacy of composition. (That's a brave way to start the day.) He says (HT John Cochrane): "Businesses will raise wages to a point where the cost is just balanced by the reduced bill for recruiting and motivating workers. At that point, […]
Twitter Followers and Canada’s Federal Election
Well, I thought it was time to resurrect an activity I last did a number of years ago – in 2011 – during an Ontario election campaign. I tracked the number of Twitter followers each party leader had during the course of the election to see if the electoral outcome was correlated with social media […]
A question for beta bankers
This post covers the same ground as my previous post, but it's written for a different audience. It's written for those people who approach monetary policy from a banking/finance perspective. Suppose you are running a commercial bank. Let's call it "BMO". And let's simplify massively. On the asset side of your balance sheet you have […]
Interest rate control as beta-anachronism
I want to make a minor point to follow up on something important that David Glasner said: "Nevertheless, our basic mental processes for understanding how central banks can use an interest-rate instrument to control the value of money are carryovers from an earlier epoch when the value of money was determined, most of the time […]
Problems with the Fraser Institute inequality study
This post was written by Mike Veall of the Department of Economics at McMaster University. Last week the Fraser Institute published a study that one of the co-authors, Christopher Sarlo, summarized in the Globe and Mail (Is the income gap growing? It depends who you measure, Thursday, July 30). This blog expands on my 150 word letter […]
On defining “recession”
The precise definition of "recession" seems to be topical in Canada right now. (I know this because my daughter phoned to ask me the definition.) It's a mug's game. I won't play. (Do geographers waste their time arguing about the precise definition of "mountain"?) I hear that the "technical" definition of "recession" is two consecutive […]
Or perhaps women’s offices actually are colder?
Another day, another article about the gendered impacts of air conditioning. Here's the story: North American offices are air conditioned to a temperature which is, from a female perspective, too cold. Women shiver at their desks; men are just fine. It's a serious environmental issue. When women have office space heaters cranked up in July […]
Worthwhile Canadian Initiative 
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