Category Canadian economy
The obligatory post about 1 CAD = 1 USD
Sometime today, two people traded one Canadian dollar for one US dollar. This has generated so much attention in the media and in the blogosphere that I feel obliged to say something meaningful. So here it is: Economists appear to live in a world that is one time derivative higher than the one that governs […]
What the Bank of Canada is thinking about
Now that the Fed has cut its interest rate by 50 bps, it’s time to start speculating about what the Bank of Canada will do on October 16. It should be noted that the Bank is dealing with a very different problem than the one facing the Fed. Indeed, it’s facing a problem that the […]
Mulroney’s economic legacy
Brian Mulroney’s* memoirs came out this week. The initial reactions have so far concentrated on his settling of accounts with Lucien Bouchard, but there have been a few comments about Mulroney’s desire to polish his claim to a positive judgment from future historians. This is of course the goal of all former politicians, but when […]
Cross-country comparisons of inequality in market and disposable income: Policy matters
This graph is taken from a recent Luxembourg Income Study (LIS) working paper (45-page pdf): The countries are arranged in ascending order of inequality in disposable income, and the Nordic countries take four of the top five positions. What strikes me is the extent to which this is due to government policy: the Gini coefficient […]
What will the Bank of Canada do?
The Bank of Canada’s next interest rate announcement is in two weeks: 13 days before the next FOMC. There’s any amount of speculation about what the Bank will do, and I’m more than happy to indulge in this game as well, but let’s look at some of the background: 1) The Bank of Canada has […]
“We blew it. But in our defense, people believed us”
Canada’s Dominion Bond Rating Service (DBRS) notes that its credibility horse has run away, and rushes to spin the barn door shut: DBRS rethinks the way it rates debt: Embattled credit rating agency DBRS Ltd. has launched a review of the way it rates asset-backed commercial paper in the wake of last week’s market freeze, […]
Worrying demographic fact o’ the day
From an article in the Bank of Canada Review (14-page pdf): Since 1980, the growth in labour input has accounted for just over half of the growth of real gross domestic product (GDP) in Canada. Most of this rise in labour input can be attributed to increases in the size of the working-age population and […]
Not Dutch Disease, it’s China syndrome
Statistics Canada has published a survey article (15-page pdf) that covers many of the points I’ve been making (eg: here, here and here) about how the Canadian economy has adjusted to the terms of trade shock induced by higher oil and commodity prices. Overall, the effects have been positive, or at least benign: The Canadian […]
Manufacturing obsession
Here are some data* on how the Canadian labour market has evolved since the CAD started appreciating against the USD five years ago: Very belated update: As a faithful reader of Andrew Gelman’s blog, I’ve been wondering if there was a better way of conveying this information. I think a bar chart would have been […]
Yes, the Bank of Canada will increase interest rates in July
Bank Governor David Dodge gave a speech today, and repeated the warnings of higher interest rates ahead: [S]ince April, we have seen two things: an increased risk of future inflation and a rise in the Canadian dollar that appears to have been stronger than historical experience would have suggested. At our last fixed announcement date, […]
Worthwhile Canadian Initiative 
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