Category Fiscal policy
Ontario’s Public Finances: A Fiscal Primer
With Ontario set to deliver its own budget on Tuesday March 29th, it is useful to provide a perspective on the province's finances given that it is Canada’s most populous province and largest provincial economy. Ontario faces some tough fiscal decision making over the next few years given a set of deteriorating public finances and […]
The preponed government spending multiplier may exceed one
From very casual observation, I get the sense that a lot of extra government spending in the last couple of years was to build stuff that would have been built anyway. They just built it a bit earlier. It was preponed government spending. Am I right? Anyway, I'm going to assume I'm right, because it […]
Live, on tape delay: It’s the 2011 federal budget
I'm off to the budget lockup, where I will be without internet access until the Minister of Finance starts to give his budget speech. I'll be writing for the Globe and Mail's budget page. Here is a short summary of what I'm looking at ex ante, and I'm scheduled to be a part of the […]
Do Keynesians understand their own models?
If we lived in a world of barter exchange, or in a world where people could use barter exchange at minimal cost, Keynesian macroeconomics would make no sense whatsoever. That is not, of course, a criticism of Keynesian macroeconomics. We do live in a world where people use monetary exchange, not barter. And people (usually) […]
The federal deficit and the GST
My blogging has been light, partly because of this, partly because my teaching load this term is heavier than usual, and partly because I've been spending so much time trying to get a good feel for the numbers that will form the background of the federal budget scheduled for March 22. I keep thinking "Okay, […]
Ricardian Equivalence does not assume full employment
The Ricardian Equivalence Proposition asumes many, many things. But full employment equilibrium (however you define "full employment") is not one of those things it assumes. I disagree with Antonio Fatas (and others who believe the same).
Ricardian confusions squared
Hang on now, Paul, Mark, Progrowthliberal, and Antonio Fatas. Justin Yifu Lin (pdf) is basically right. He's making an important point. It's similar to one I made a couple of years back. Sure, a temporary increase in useless government expenditure, even under Ricardian Equivalence, will give a bang for the buck. But it's a totally […]
The sources of the federal deficit revisited
There were a couple of puzzling things in my recent post on the sources of the federal defict, and I think I've solved the puzzle. I made a mistake.
How the federal government went from persistent surpluses to persistent deficits
Update: See this follow-up post, which corrects some mistakes made below. I've added comments pointing out which parts needed revision. In the early years of the millenium, the federal government ran what appeared to be an indestructible series of budgetary surpluses. No matter how many tax cuts were implemented, it ended each year with a […]
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