Author Archives: wciecon
Hopefully, Tomorrow Won’t Be Yesterday
A short quick post. Yesterday’s job numbers for Canada were greeted with surprise. With 55,900 jobs added in February, the sentiment as best summarized by Doug Porter, Chief Economist with BMO Capital Markets is that: “The economy clearly is not falling off a cliff by any means, arguably quite the opposite”. This is despite what […]
The Federal Debt of the United States, 1791 to 2018: A Presidential Ranking
A recent story in the National Post by Tristan Hopper highlighted the “utterly unbelievable scale” of current US federal public debt levels. As is always the case, it is useful to get some historical perspective on the evolution of the U.S. federal debt over time – which under President Trump has become the biggest U.S. […]
Carbon taxes and the Marginalists’ difficult idea
This Economists' Statements on Carbon Taxes has been signed by a host of prominent economists: Global climate change is a serious problem calling for immediate national action. Guided by sound economic principles, we are united in the following policy recommendations. I. A carbon tax offers the most cost-effective lever to reduce carbon emissions at the […]
Inflation and the Debt/GDP ratio
I'm trying to write a simple explainer. The best way to understand how inflation affects the debt/GDP ratio is to start out with a scenario where it doesn't. Then look at ways in which the real world is not like that scenario. Here's the "No Effect" scenario: The Bank of Canada suddenly decides to raise […]
NAFTA – The “Worst” Trade Deal Ever
With time on my hands over the last week of the holiday season, I spent a bit more time than usual surfing news channels and watched a press conference by U.S. President Donald Trump in which among other things he again reiterated how the United States had been hard done by NAFTA and that it […]
“Are we at full employment yet?”
I vaguely remember having seen this movie before, the earlier British version. And it's a frustrating movie to watch, because nobody knows where full employment is, except maybe when we've driven past it and can see it in the rear-view mirror. And the question itself always gets confused between asking where full employment ought to […]
Are Open Market Operations wrong-signed when nominal rates are negative? (No)
I'm going to start out with a silly unrealistic thought-experiment. Then I'm going to say why I think my silly unrealistic thought-experiment might matter. A central bank issue two types of money: $1 notes; and $100 notes. The two types of money are not perfect substitutes: the $1 notes are convenient for small purchases; the […]
Explaining S=I: Inventories vs Adding up Individuals
It's easy to teach students the arithmetic showing that actual saving must equal actual investment (S=I). But many students (quite rightly) want more than the arithmetic. Because S=I is not intuitive, and good students want to understand the intuition. I think that most profs will try to explain the intuition by talking about inventories of […]
Keynesian Beauty Contest SRAS shocks
[I'm not fully happy with this post. I think it does an OK job of explaining SRAS shocks that the central bank accommodates. But it doesn't say what happens when the central bank does not accommodate SRAS shocks. And I would like to integrate George Selgin's analysis of SRAS shocks in Less Than Zero, which […]
Becoming Sustainable: The Six Stages of Provincial-Territorial Government Health Spending
The Canadian Institute for Health Information (CIHI) has released its 22nd annual edition of National Health Expenditure Trends covering the period 1975 to 2018 and the basic highlights are as follows: Total health expenditure is expected to reach $253.5 billion or $6,839 per Canadian in 2018. In 2018, total health expenditure is expected to rise […]
Worthwhile Canadian Initiative 
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