Author Archives: wciecon
Economics is better (in some ways) than it used to be
The discipline of economics is in better shape today than it was in the 1970s, 80s and 90s. Here are five reasons why: 1. Now, economists test their theories. In the 1960s, the majority of published economics papers were entirely theoretical. Even in the 1980s, the typical top-10 journal published mostly theoretical work (reference here). Today, top journals like […]
The National Dream’s Economic Legacy
The completion of the Canadian Pacific Railway (CPR) in 1885 was more than an impressive engineering achievement; it was also a significant joint economic undertaking by the public and the private sectors and a key ingredient in Canadian nation building as it provided the east-west transport corridor that made the Canadian west an investment frontier. […]
We should not teach the Keynesian Cross in Intro Macro
I have taught Intro Economics maybe 30 times in total. (I started very young). Forget about the A students, because there aren't many of them. (We don't all have massive grade inflation.) Think about the C students. And forget about the Economics majors, because other people will teach them after you. Think about the students […]
Taxation of the family: everything old is new again
Matt Krzepkowski and Jack Mintz have recently produced a working paper titled "No More Second-Class Taxpayers: How Income Splitting Can Bring Fairness to Canada's Single-Income Families." The paper argues that higher income single-earner married couples are "disadvantaged by the current system." It proposes to put an end to that by allowing income splitting, so a […]
Raising expectations of inflation vs raising expectations of NGDP growth
Brad DeLong says: "If you believe–as I do–that the overwhelming proportion of the effects of non-standard monetary policy at the zero nominal lower bound come from reducing short-term safe real interest rates by raising expectations of inflation,…" I believe something a bit different. Let me try to convince Brad to see it my way. Let […]
Rates, rents, shares, and capital theory
I think this is the technology that Paul Krugman has in mind: 1. C + Kdot = A.La.K(1-a) C is consumption, K is the capital stock, Kdot is investment, L is employment, A is a parameter that represents productivity, a is a parameter that (in competitive profit-maximising equilibrium) will equal labour's share of national income, […]
Animal Spirits?
I suppose it is a little early for news stories that characterize the dog days of summer but a recent CBC item on Prairie Dogs certainly caught my attention. Prairie dogs are social animals that live in cooperative groups and apparently they have relatively sophisticated language. According to the story, via their chirps they are […]
What is the link between labour’s share of income, financialisation, and income concentration?
Bruce Bartlett draws attention to three developments in the US economy over the past 30 years or so: The declining share of labour in national income in the US The growing 'financialisation' of the US economy The concentration of income at the top of the US income distribution.
This is what a barrier to trade looks like
The line-ups for the Kazungula ferry start two or three kilometres from the water on either side of the Zambezi river. Each line up might be 150 trucks long. But the Kazungula crossing is served by just two pontoon ferries. Each ferry takes one truck, and makes the return journey in half an hour or so, transporting perhaps […]
New Keynesian countercyclical fiscal policy isn’t what you probably think it is
If it weren't for the Zero Lower Bound on nominal interest rates, there would be no macroeconomic role for fiscal policy in New Keynesian models. Monetary policy alone could and therefore should be used to hit the macroeconomic target, because this leaves fiscal policy free to try to hit its many microeconomic targets as best […]
Worthwhile Canadian Initiative 
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