Category Fiscal policy
Swapping the assignment of targets to instruments
Before leaving on his pilgrimage, the King appoints two ministers. He gives the first minister control of instrument m, and tells him to set m so that the target variable M is equal to the target M*. He gives the second minister control of instrument f, and tells him to set f so that the […]
Visioning the Surplus
The Federal government is poised to move into a period of fiscal surplus. According to the 2014 Federal Budget, the 2014-15 fiscal year will see a 2.9 billion dollar deficit (which could actually be a small surplus due to the 3 billion dollar contingency fund). After that, 2015-16 will see a 6.4 billion dollar surplus […]
The 2014 Federal Budget
With so much commentary out there on the 2014 Federal Budget, there is probably not much left to contribute but here are a couple of thoughts.
Is Ottawa Shortchanging Ontario? You Decide.
Well it is federal budget time once again and the inevitable political opera around transfer payments is in progress. This time, Ontario is feeling shortchanged and wants Ottawa to restore the 641 million dollar cut in transfer payments it is slated to receive for the 2014-15 fiscal year. Ontario Finance Minister Charles Sousa argues that […]
Coloured sunspots and shells
This post is a sketch of a model of secular stagnation; and of bubbles that burst and get replaced by different bubbles. I don't formalise the model mathematically, because I don't have a comparative (or absolute) advantage at that sort of thing. But I think it could be formalised fairly easily. Start with a model […]
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 A recent Cohn column in the Toronto Star on Ontario’s economic stall concluded “Outdated equalization and transfer payments cry out for reform, but will likely continue to bleed Ontario’s taxpayers of about $12 billion a […]
Optimal fiscal and monetary policy in a hybrid Old/New Keynesian model with and without the ZLB
Update: see update at very end. Some people aren't as rational and future-oriented as agents in New Keynesian models. Some people aren't as present-oriented as agents in Old Keynesian models. A hybrid Old/New Keynesian model, with both types of agents, looks attractive. But other people's hybrid models looked too complicated, so I decided to build […]
The Economics of Rob Ford
The dramatic municipal opera currently underway in Toronto over embattled Mayor Rob Ford is fascinating for those of us who live in small hinterland “non-world class cities” that are supposedly devoid of the sophisticated political leadership enjoyed by cities like Toronto. The enduring popularity and populism of Rob Ford in Toronto despite his outrageous behavior […]
Neo-Wicksellian indeterminacy in pictures
Pre-requisite: second year macro (go read the intermediate textbook on ISLM).
On understanding and spinning your own New Keynesian model
If I were a different sort of person, I would now be accusing some macroeconomists of deliberately misrepresenting the policy implications of their models in order to further their own political agenda. But I am not that sort of person. I don't generally go for conspiracy theories. And I myself used to make the same […]
Worthwhile Canadian Initiative 
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