Category Fiscal policy
What’s wrong with New Keynesian macroeconomics — an MM perspective
There are many things right with New Keynesian macroeconomics. It is a very good synthesis of many strands in Monetarist, Keynesian, and New Classical macroeconomics. But this post is not about what's right with New Keynesian macroeconomics. There are also many things wrong with current New Keynesian macroeconomics. New Keynesian macroeconomists are aware of many […]
A response to Paul Krugman
Paul Krugman has a lot in common with quasi-monetarists like me. [Update: I'm going to re-emphasise this. On reading Paul's post, it is now much clearer to me than it was in the past that there is a helluva lot in common between Paul Krugman and quasi-monetarism. So many economists just don't get the central […]
The Keynesian case for government wage cuts
Park your politics at the door for this one. Yes, I know that will be hard for some. But it's OFF TOPIC. [Update: now that the macroeconomics have been thoroughly discussed in comments, I can relax this. Civilised discussion of politics is now OK.] Yes, I understand Keynesian macroeconomics at least as well as most […]
Dealing with the Current Financial Crisis
Well, I'm certainly not a macroeconomist and I have even less expertise when it comes to the world of money and banking and international finance. Yet, given the current situation in financial markets and the world economy, I cannot help but wonder if the problem is also institutional. So, here it goes.
US AAA: bleg and random thoughts
First the Bleg: since I'm so useless at questions like this, what is Canada's own history of bond ratings? Have Canada's federal bonds been upgraded or downgraded often in the past? What were the circumstances? Did it make much difference to anything? (Or any other countries, other than Canada and the US, for that matter, […]
Taxes and the value of paper money
Does the value of an intrinsically worthless (paper) money depend on the government's power to tax? I am going to answer this question from a quantity-theory perspective. The short answer is "yes". But the full answer is different from some other theories that also answer "yes". Those of you who already understand the modern quantity […]
Can the buck “break the buck”?
Obviously not, in any literal sense. But this might be a metaphor worth exploring. Are central banks like money market mutual funds? What happens to the value of the US Dollar, or the Euro, if the risk of sovereign default causes the value of a central bank's assets to fall below the value of its […]
Do Keynesians believe their own models?
I ask this as a quasi-Keynesian myself. I'm not (merely) trying to score points. [Update 2. Paul Krugman weighs in. Like Brad DeLong, and Scott Sumner (in comments), he questions my assumption that the central bank can keep the interest rate fixed, without buying all the outstanding bonds.] Take the standard ISLM model straight off […]
Taxation and other forms of sacrifice
The most minimal form of government is a night watchman state: a government that provides law and order, and lets markets take care of the rest. But are people willing to pay the taxes and make the sacrifices required to support even this most rudimentary level of public services?
Is There a Hauser’s Law for Canada Too?
Economics has a number of “Laws” floating around that are rooted in empirical observation and then put forth as natural inexorable systemic laws. For example, in public finance, there is Wagner’s Law of Expanding State Activity, which links the size of the public sector to income. In health economics, there is Roemer’s Law, which […]
Worthwhile Canadian Initiative 
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