Author Archives: wciecon
Does house building cause house price inflation? Our Sokal hoax
What we have just witnessed is the economics equivalent of the Sokal hoax. It wasn't a hoax, just a mistake, but the effect was the same. We all make mistakes. What matters is that the rest of us didn't all spot that mistake immediately. Even those of us who did see that something was wrong […]
Stability and counterfactual conditionals
I'm writing this just to try to get my own thoughts straight, on a topic I know nothing about. And because commenter Ram asked me to. Read at your own risk.
On intro micro first, and splitting micro and macro
I thought Noah Smith's post on why we should teach intro micro before intro macro was very good. I agree with Noah: even though macro is much more glamorous, micro is just as useful and important, and we are more confident that micro works. (Read his post for the full story.) I want to add […]
Earnings in the “Good Old Days”
The last two times I’ve taught my quantitative economic history course, I have assigned a micro-data collection project based on the 1901 Census of Canada. All in all, this data collection was a good experience for the students given they got some direct experience collecting primary data, coding it and then analyzing it. Moreover, I […]
Helicopter money does not cause deflation
Steve Williamson's latest: "Next, conduct a thought experiment. What happens if there is an increase in the aggregate stock of liquid assets, say because the Treasury issues more debt? This will in general reduce liquidity premia on all assets, including money and short term debt. But we're in a liquidity trap, and the rates of […]
A simple story about non-reversibility of causation
I believe there exists an equilibrium relationship between three variables: the position of the Gas pedal; the Speed of the car; the position of the speedometer Needle. I have verified this relationship empirically. I have a crude theory of how cars work that can explain this relationship. But any automotive engineer would laugh at my […]
The effect of nominal interest rates on inflation
This is for David Andofatto, in response to his recent post (and for anyone else who might be interested). If the central bank raises the nominal interest rate, what happens to actual and expected inflation depends on why people think the Bank did it. The representative agent cannot be assumed to know he is the […]
Federal Transfers, Equalization and Ontario’s Cries for Reform
Transfers and equalization often flare up in Canadian policy discussions with the cry that there is a need for reform. A recent Cohn column in the Toronto Star on Ontario’s economic stall concluded “Outdated equalization and transfer payments cry out for reform, but will likely continue to bleed Ontario’s taxpayers of about $12 billion a […]
Russet apples and the Sam-I-Am theory of affirmative action
For years, I've been avoiding buying russet apples. They have such unattractive tawny brown skins. Not like the smooth, pink-cheeked Royal Galas and MacIntoshes. Until this fall. "What kind of apples would you like?", I asked my out-of-town visitors. "Well, russets are the best, of course, but I doubt you'll be able to get them. […]
Why inflation will not fall off a bottomless cliff
"My model can identify the edge of a bottomless ZLB cliff. To the north of the edge of that cliff, there can be an equilibrium rate of inflation. To the south of the edge of that cliff, there cannot be an equilibrium rate of inflation, because the cliff is bottomless. Therefore inflation will not go […]
Worthwhile Canadian Initiative 
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