Category International
Why can’t the Fed just buy yuan?
The title really says it all. And it's not a rhetorical question; I don't know the answer. But if the US is really concerned (H/T Mark Thoma) about the US dollar being too high against China's yuan, and it believes China is "artificially" preventing the yuan from appreciating against the dollar by foreign exchange market […]
Oil prices in currencies other than the USD
I've received a request to update my irregular series of graphs of movements in oil prices in currencies other than the USD. There's been a certain amount of movement in the oil and forex markets over the past few months, so I'm happy to oblige: The CAD and the euro have appreciated by about 20% […]
US travel to Canada and the exchange rate: A textbook case
Via Megan McArdle, I learn that Kevin Drum is puzzled by the drop in day trips by Americans to Canada. Megan is quite right; the exchange rate is the explanation. I've been teaching from the French translation of Krugman and Obstfeld's International Economics. Unfortunately, it was translated for the European market, so all the examples […]
How far out of line is the Canadian exchange rate?
No one knows. There is approximately an infinity of exchange rate models out there, and according to the one(s) used at the Bank of Canada, the CAD is over-valued. I don't think anyone will strenuously object to the notion that the CAD is in some sense too high – that is, higher than what most […]
Rambling thoughts on Canadian house prices and global savings gluts
This isn't a very focused post. There are two sets of thoughts bubbling through my mind this morning. The first is about Canadian house prices; the second is about global savings gluts. But the two topics are very definitely related. There is a lot of anecdotal evidence of a pick-up in at least some Canadian […]
Talking down the Loonie?
The Loonie (Canadian dollar) has appreciated against the US dollar recently. The Bank of Canada expressed its concern in Thursday's Announcement. "In recent weeks, financial conditions and commodity prices have improved significantly, and consumer and business confidence have recovered modestly. If the unprecedentedly rapid rise in the Canadian dollar (which reflects a combination of higher […]
Oil prices in currencies other than the USD
Once again, we're seeing an increase in USD-denominated oil prices accompanied by a depreciating USD, so it was only a matter of time before someone put 1 and 1 together and got 11: Crude awakening: It's oil about the US dollar: Some people would have you believe that oil's surge above $60 (U.S.) a barrel […]
The US may need a financial hegemon. But the US is not the world.
Canadians are federalists by instinct, so my reaction to Dani Rodrik's recommendation to resist the imposition of a global financial regulator with a Procrustean mandate is to nod my head in approval. In the current context, the proper Canadian reaction to such a proposal would be to wonder why on earth ceding authority to a […]
GDP, GDI, terms of trade and why Canada is in a recession: It’s all about the beer and pizza
The Parliamentary Budget Office has released a report (pdf – h/t to Kady O'Malley) that makes note of the distinction between Gross Domestic Product (GDP) and Gross Domestic Income (GDI), and shows that by the latter measure, the fourth quarter of 2008 was even more dreadful than the GDP numbers that made all the headlines. […]
The perils of pricing publicly-provided products
One of the more resilient errors in policy analysis – in Canada, anyway – takes the following form: a) Public goods should be provided at zero price by the government. b) Therefore, goods provided by the government should have zero price. The former assertion is correct, but b) is a non sequitur: not all publicly-provided […]
Worthwhile Canadian Initiative 
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