Author Archives: wciecon
The collective speed limit game
Neo-Fisherite fun. Plus concrete steppes fun. 1. Suppose you don't care what speed you drive. Anything between 0 and 200 is all the same to you. But the cops do care what speed you drive. They want you to drive at exactly the speed limit S*, neither faster nor slower. (They have a symmetric target.) […]
Bond Finance and the Great Depression
Attending the Social Science History Association Meetings in Toronto this weekend provided as usual an opportunity to take in new papers and ideas, digest them and then think about what further insight they might add to our knowledge of past economic events. One such paper was Richard Sutch’s (University of California) “Financing the Great War: […]
Black holes and Neo-Fisherites are a monetary phenomenon
Suppose you live in a Neo-Wicksellian economy, where the central bank sets a nominal rate of interest. Black holes are a theoretical possibility. Nominal demand for goods can spiral down to zero, if people expect it to. And white explosions are a theoretical possibility too. Nominal demand for goods can spiral up to infinity, if […]
Neo-Fisherites again: Schmitt-Grohe and Uribe
I was scared of reading Stephanie Schmitt-Grohe and Martin Uribe's paper (pdf). All I knew was that it was a technically demanding paper, and that it had the "Neo-Fisherite" result — if the central bank increased the rate of interest, inflation would rise. I have now read it. Sort of. I think I now understand […]
Neo-Fisherites and the Scandinavian Flick
Noah Smith wonders if "reality might topple a beloved economic theory". Well, if you look at Sweden, reality just confirmed that beloved economic theory. The Riksbank raised interest rates because it was scared that low interest rates would cause financial instability. Lars Svensson resigned in protest. Then inflation fell, and the Riksbank needed to cut […]
Reverse Regression and the Great Gatsby Curve
[Update: I'm getting an awful feeling this post may be totally wrong. Does (1/b)/[1+Var(V(i))/Var(Y(i))] = b if the Lamarck model is true? If so, my proposal won't work. Wish I could do math.] [Update2. Nope, I think it will work. But Majromax in comments has come up with a simpler way to do the same […]
Comparing Health Spending Restraint: Past and Present
Adjusting for inflation and population growth, the new CIHI numbers show per capita provincial and territorial government health expenditures have declined since their peak in 2010. From a high of $2,584 (1997 dollars), real provincial and territorial government health spending per capita has declined by 3.9 percent to reach an estimated $2,483.
Making two macroeconomic fallacies true
This will be a confusing post, because I'm writing it to try to get my head clear on something. And it's still not clear. There are no answers here: only questions, and strange thoughts. 1. Lots of people believe the Inflation Fallacy: "Inflation makes us worse off because a 1% rise in prices means we […]
New CIHI Health Numbers: Health Care Cost Curve Still Bending
The Canadian Institute for Health Information has released its 2014 edition of health spending data – National Health Expenditure Trends, 1975 to 2014 – and the numbers seem to show a continuing trend towards slower growth of health expenditures in Canada.
Will somebody please think of the Data Generating Process!
Or: "Should Finance People be allowed out unaccompanied by a macroeconomist?". If the central bank is doing its job right, monetary policy ought to appear to be irrelevant. The Economist says (HT Mark Thoma) "Interest rates do not seem to affect investment as economists assume", and this means that monetary policy is irrelevant. (Let's just […]
Worthwhile Canadian Initiative 
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