Author Archives: wciecon
Alpha banks, beta banks, fixed exchange rates, market shares, and the money multiplier
Forget money and banking for a minute. Let's think about international macroeconomics. Just suppose the US Fed, for reasons unknown, pegged the exchange rate of the US dollar to the Canadian dollar. The Fed makes a promise to ensure the US dollar will always be directly or indirectly convertible into Canadian dollars at par. The […]
Why do beginner econometricians get worked up about the wrong things?
People make elementary errors when they run a regression for the first time. They inadvertently drop large numbers of observations by including a variable, such as spouse's hours of work, which is missing for over half their sample. They include every single observation in their data set, even when it makes no sense to do […]
Resources, Revenues and Alberta Premiers: The Oil Must Flow!
In Ancient Rome, a key imperial duty was to maintain the flow of grain and gladiatorial entertainment to the masses of Rome. Woe to the Emperor if the flow of grain was interrupted and the entertainment fell in quality. The Empire’s mantra was that the grain must flow! For Alberta premiers, charged with the guardianship […]
Two LM curves
Sometimes we borrow money from the bank because we plan to spend more than we expect to get in income. And sometimes we borrow money from the bank because our stock of money is too small relative to our flows of planned spending and expected income. Here is a rough sketch of a simple model […]
Discriminating custom essay services
The most fascinating part of custom essay writing websites are the price sheets. The market is international, and – judging from the number of such sites – highly competitive. For an undergraduate essay with a 5 to 6 day deadline, typical prices are in the range of $16 per page, $16.76 per page, $18.99 per page (for premium […]
The sense in which the stock of money is “supply-determined”
Consider three positions: 1. The stock of money is determined by the demand for money, and not by the supply of money. 2. The stock of money is determined both by the demand for money and by the supply of money. 3. The stock of money is determined by the supply of money, and not […]
Ontario Manufacturing: Not Getting Better Anytime Soon
The Ontario economy’s manufacturing sector was particularly hard hit by the 2009 recession. One measure of whether it is rebounding is to see if there is substantial new investment going into Ontario manufacturing in terms of capital expenditures on construction, machinery and equipment. It does not look very good.
One general theory of money creation to rule them all!
The Bank of England has published a lovely clear article (by Michael McLeay, Amar Radia and Ryland Thomas) on "Money Creation in the Modern Economy". Thanks to JKH for the tip-off. (Here is JKH's blog post). But I disagree with it. Thinking about monetary policy in terms of interest rate policy just doesn't work. It […]
Feminist framing and general equilibrium theory
Consider a very simple general equilibrium 2X2 example to illustrate my point: Divide the population into two groups: call them "men" and "women". Divide all outcomes into two groups: call them "arts" and "science". Everybody is somewhere in the 2X2 matrix. Here are four questions we could ask of the data: 1. Why are women […]
Macro savings vehicles
An individual who decides to save for retirement has a choice between a number of different savings vehicles: stocks, bonds, real estate, etc. What are the choices when we aggregate up to the economy as a whole? I write this post in response to an email from someone who is knowledgeable about the savings vehicle […]
Worthwhile Canadian Initiative 
Recent Comments