Category Canadian economy
Is the macroeconomic importance of finance an artefact of current monetary policy?
Suppose the Bank of Canada pegged the price of gold. If an increased demand for gold caused a recession, would macroeconomists be told they needed to pay more attention to the theory of the demand for gold? Or would the Bank of Canada be told to change its policy? Suppose the Bank of Canada pegged […]
CMHC reserves revisited
There are two questions that Canadian taxpayers need to ask about the Canadian Mortgage and Housing Corporation: 1. Are CMHC fees for mortgage insurance high enough? 2. Does CMHC have a big enough reserve against potential losses?
One Million Jobs
Ontario Conservative Leader Tim Hudak has promised to create one million jobs over eight years and plans to introduce his Million Jobs Act Bill in the Ontario Legislature when it resumes sitting on February 18th. Tim Hudak is presenting a five-point plan in his private member’s bill to create jobs that includes among other things […]
Monetary policy, fiscal policy, the target, and the size of the central bank
Glen Hodgson asks whether the Bank of Canada's 2% inflation target is too low. He is right to ask that question. I want to explore the trade-offs. Suppose you are a macroeconomist (like Simon Wren-Lewis) who believes that the Zero Lower Bound on nominal interest rates will be a binding constraint in some circumstances, and […]
When Will Low Interest Rates End?
A recent piece in the Financial Post titled “How many times can economists cry wolf about interest rates” caught my interest because I – like many economists in Canada – have been expecting interest rates to eventually start to rise and yet they do not. So when will Canadian interest rates start to go up? […]
Canadian Housing Prices: Some More Data to Ponder
Well, given the continuing pronouncements that Canada’s housing market is overvalued, I thought I would follow up my November post with another take on the data. Among the many suggestions received on that post was to extend the data back further and to look at price/rent ratios. This time, I decided to gather CMHC data […]
I do not understand recovery from recessions. Maybe it’s AD/PSST?
The Canadian economy has been slowly recovering from the recession. So have some other economies. I want to be able to explain what is going on. I understand why economies go into recession. At least I think I do. AD falls, many prices and/or wages are sticky, so real output falls. Done. But what about […]
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 […]
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 […]
Canadian Housing Markets: Bubbles if Necessary but Not Necessarily a Bubble
The debate over whether or not Canada’s housing market is a bubble that is going to crash heated up again this month. Earlier this month, the Financial Times warned that the Canadian housing market was “perched precariously at its peak”. Bank of Canada governor Stephen Poloz said this week that Canada’s housing market was not […]
Worthwhile Canadian Initiative 
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