Author Archives: wciecon
Unbundling the BA
The most useful university courses and degrees are the hardest to get into. For example, most people would benefit from knowing something about accounting. But do universities facilitate the study of accounting? No. Everywhere admission into Bachelor of Commerce and Bachelor of Business Administration programs is restricted. It's the interests of business schools to turn […]
Ontario and Its Neighbours
I suppose I have become somewhat obsessed with Ontario’s economy and its performance but here I go again with a few comparisons. Ontario is strategically located on the Great Lakes-St. Lawrence waterway adjacent to the huge population of the US northeast. Its neighbours are trade partners and markets as well as economic competitors. How does […]
Why can’t central banks monetise something else?
Other than government bonds? That's a rhetorical question. They can. David Andolfatto has gone over to the Dark Side, and all the lefty keynesians are celebrating their new convert to Big Government Deficits. (Tongue in cheek warning.) Not so fast. David imagines a world where the demand for (central bank money + government debt) is […]
VAR vs WTF!?
Vector auto regressions (VARs) are supposed to tell us how the economy would respond over time if hit by a shock, by looking at past patterns of responses to shocks. A "shock" means "a deviation of one of the variables in the VAR from the level that was forecast by the VAR". And "shocks" include […]
When I really learned the David Ricardo idea
[Update: Tim Worstall has a beautiful response to this post, applying the Ricardian idea to trade between humans and robots (or the human owners of robots). Will the robots out-compete us in everything, causing mass unemployment? Nope. Robots will never have a comparative advantage in everything. Once again, Tim's Ricardian point seems totally obvious once […]
The mechanics of exchange and non market-clearing prices
[Update: on second thoughts, maybe this post was not quite ready for prime-time. But I think it's still fun to play with.] Here is a very simple model of a pure exchange economy where the mechanics of exchange (who can trade what with whom) determine whether very small departures of prices from market-clearing cause very […]
Deficit targeting vs Debt targeting
Is a "balanced budget law", even a flexible law that allows temporary deficits (and surpluses) in appropriate circumstances, the right way to think about prudent sustainable fiscal policy? A financial asset is just a bit of paper with a promise written on it. A promise is a commitment about the future actions of the promiser, […]
The Federal Deficit: A Long Term View
In honour of the 2015 Federal Budget and the balancing of the budget, why not a retrospective on Canadian federal government deficits since 1867. In the period from 1867 to 2014, the Federal government has run a deficit in 108 out of 148 years or 73 percent of the time. In nominal terms, the federal […]
Noah vs Steve: a suggested interpretation
Is Woodford's "cashless" economy a model of a monetary exchange economy, or a model of a barter economy? (In a monetary exchange economy, all other goods are only exchanged for one good called "money"; in a barter economy each good can be exchanged for any other good.) If you answer "barter economy", then modern New […]
Worthwhile Canadian Initiative 
Ontario Budget Commentary
Well, another Ontario budget has come and gone. The government still plans to balance its budget by 2017. According to the budget projections it will do this largely by increasing revenues and restricting expenditure growth.