Category Fiscal policy
Fiscal Federalism revisited
A French, German, and Canadian student were asked to write an essay on elephants……And the Canadian student titled his essay "Elephants: a Federal or Provincial responsibility?" The Eurozone is what Canada would be if we abolished the Federal government, leaving only the Bank of Canada. The 16 Eurozone countries are the 10 Canadian provinces. Americans […]
The optimal destruction of wolves
This post is not about wolves. Sorry. You are an armed shepherd guarding 16 sheep against circling wolves. There are more wolves than you have bullets. It takes ki wolves to kill one sheep, where ki is the strength of sheep i. The number of wolves is greater than SUM{ki}, so they could kill all […]
The rebound in federal government revenues
The Department of Finance publishes monthly numbers for how much money it has taken in, and how much it has spent. It chooses to run these numbers on the afternoon of the last Friday of the month these days. I'm pretty sure that when the feds were running surpluses, these numbers were released first thing […]
Negative and Positive sovereign debt feedback loops
There are two sorts of countries: countries that can print money to pay their sovereign debts; and countries that can't. Canada is a printer; Greece is a non-printer. Both sorts of countries can get into trouble if they issue too much sovereign debt; but they get into very different types of trouble. Printers get into […]
The Euro money supply
I agree with Ambrose Evans-Pritchard and Jacques Cailloux. It's what I was trying to say yesterday. And on Thursday. It's probably gotten too big for Germany, France, the IMF, whoever, to fix. Only the European Central Bank has enough money to fix the Eurozone problem; because it can print it. What's ironic is that what […]
The Holy Roman Eurozone
I started writing this post yesterday. It's already out of date. This is what I wrote yesterday; I will continue the post below. Greece has now gone, at least in expected value terms. With bond yields increased to over 13% today, there is no way I can see Greece running a primary surplus big enough […]
A public finance vignette
Here's a short story, simple but true, that illustrates a lot of public finance: from public choice to Ricardian Equivalence. I live on a cul de sac. Many of my neighbours wanted our gravel road paved, and were prepared to pay for it. The municipality held a neighbourhood referendum, and the motion passed by more […]
Eurozone: is this the big one?
I'm scared again. I haven't felt this scared for over a year. Things were starting to look better, in Canada in particular, but around the world more generally. Now Greek bond yields are shooting up. I was worried about the Eurozone in January 2009. And again in December. Maybe it was just my Euroskeptic "Anglo-Saxon" […]
How the hell can we tell (if fiscal policy worked)?
I feel guilty about not wading into the recent debate about whether fiscal policy helped the Canadian economy recover from the recession. It's one of the things I am supposed to know something about — basic macro. But there's a reason I couldn't be bothered to take sides and join in. The patient is ill. […]
The fiscal stimulus may well have been ineffective. But that doesn’t mean that it wasn’t a good idea.
A flurry of punditry has been provoked by a Fraser Institute thingy claiming that the federal government's fiscal stimulus program has had essentially no effect on the Canadian economy. (Question: why do they insist so much on the fact that they use numbers from Statistics Canada? Where do they usually get their national accounts data? […]
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