Category Canadian economy
Reforming Government: Do We Need a Human Investment Super-Ministry?
From time to time, I like to ruminate on what could be done to better develop or improve the delivery of government services especially given the tendency of government ministries to overlap when providing services. This gets a further push when I am teaching public finance – as I am this term. There is of […]
Temporary vs permanent fiscal policy in a small open inflation targeting economy
Just a short note as a backgrounder for the current Canadian debate about fiscal policy. This is totally unoriginal boring textbook stuff (at least I hope it is, anyway). Prerequisite: intermediate macro (or special permission to skip to the results if you promise not to ask me daft questions about where they came from). The […]
Is Two the new Zero? Why Divine Coincidence failed
Speculative, as Tyler Cowen would say. When people play the Dictator Game Ultimatum Game [thanks Alex] they don't play the way economists would predict. The Nash Equilibrium is for the first player to propose a 99:1 division of the pie take-it-or-leave-it offer, and the second player to accept. Because 1% is better than nothing, so […]
Old Keynesian vs New Keynesian fiscal policy
Mostly for non-macroeconomists. I first learned macroeconomics in the very early 1970's in the UK. I learned that the macroeconomy was not automatically self-equilibrating, and that the government should use fiscal policy to target "full employment" (aka "potential output"). The government should loosen fiscal policy when the economy was below potential and tighten fiscal policy […]
One awkward question about Stephen Poloz’s speech (on Integrating Financial Stability into Monetary Policy)
Suppose the Bank of Canada were following a 5% NGDP level-path target. And suppose that actual NGDP was on target, and was expected to remain on target in future. And suppose you were Governor, and one of your advisors gives you some important news. Financial markets are in a bubble, so the prices of financial […]
Keynes just left Canada
Paul Kugman's post title is "Keynes comes to Canada". Paul is wrong. Keynes was in Canada, but he just left. Look at this graph from Matthew Klein (a very good article, by the way): The other bit of information you need to know is that the Bank of Canada hit the Zero Lower Bound in […]
How much revenue will the Liberals generate with a new tax bracket on high earners?
[I started writing this post in May, but I stopped when it looked like the Liberals were not going to be in a position to implement this measure. Happily, I didn't actually delete it.] [An earlier version made a stupid mistake; I did everything under tha assumption that the increase was 3 percentage points, and […]
Labour market flows revisited
It's been a while since I've looked at patterns in gross labour market flows; the last time was here. The basic methodology is taken from Stephen Tapp's CJE article, in which he extracts labour market transitions from the Labour Force Survey Public Use Microdata Files. Not all transitions are covered by the LFS questionnaire, but […]
Lumbering Along in the Finding Data Process
Well, all I was trying to do was introduce a set of lecture slides on the nineteenth century timber trade with a simple overview of the Canadian logging industry's employment in the twentieth century. Well, three hours later it has proven to be a more frustrating exercise than I would have expected but here is […]
Interest-free loans from the central bank to the government
What is the difference between: A. I print $100, and give it to you as an interest-free loan. B. I print $100, lend it to you at 5% interest, so you give me $5 per year, and then I give that $5 per year straight back to you. C. I print $100, lend it to […]
Worthwhile Canadian Initiative 
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