Category International
Debt and Growth
As you probably all know, the Reinhart-Rogoff 2010 study found economic growth slows when the debt to GDP ratio exceeds 90 percent. They used data for 44 countries over a 200-year period and found the relationship between debt and real GDP growth was weak for debt to GDP ratios below 90 percent. However, above 90 […]
Modern LM curves are vertical
Modern teaching of modern macroeconomics and modern monetary theory should reflect modern monetary policy — what modern central banks actually do nowadays. That means the modern LM curve is vertical.
Teaching Mundell Fleming
The Mundell Fleming model is usually taught in second year macroeconomics. It's the open economy version of the ISLM model. This post is me disagreeing with Simon Wren-Lewis about teaching open economy macro (in textbooks and in the classroom). It is not a disagreement about open economy macroeconomics. Simon says that the textbook Mundell Fleming […]
Exchange controls, barter, and Cunning Plans
It was sometime in the 1960's. My uncle was teaching in Bulgaria. He wanted to buy stuff in Britain, but wasn't allowed to take much money out of Bulgaria. My father was farming in Britain. He wanted to buy stuff in Bulgaria, but wasn't allowed to take much money out of Britain. My uncle and […]
Government Spending and Crime
I’ve been doing some data exploration on public sector spending and societal outcomes and have some preliminary results that have caused me to puzzle about what they might mean. I’ve been looking at annual data for OECD countries (33 countries) over the period 2000 to 2010 and the relationship between public sector size and crime […]
Is Economic Growth Really Ending?
Robert Gordon has argued in his recent NBER paper “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds” that growth rates have slowed and we are reverting to very low historical growth rates and indeed a period of economic stagnation. However, what I find intriguing is that an examination of some long-term data […]
Why Is Manufacturing Special?
Andrew Coyne has an excellent piece in the National Post dealing with why there are no good reasons for corporate handouts in the wake of yet another round of assistance to the automobile sector. He asks what the economic rationale for this assistance is – that is, what is the economic value? He argues that […]
The Year Ahead
The New Year is when we try to look ahead and project what we think the economy will be like. There is no shortage of forecasts from banks, international economic agencies and independent forecasters as to how the Canadian, US and world economies will fare over the next year.
Canadian Exceptionalism in Compensation
The Parliamentary Budget Office's most recent release "The Fiscal Impact of Federal Personnel Expenses: Trends and Developments" provides some interesting statistics on the amounts of employee compensation paid by Canada’s federal government. According to the report: “in 2011-12, Canada’s federal personnel expenses were $43.8 B, or 2.55 per cent of GDP. These expenses supported a […]
As the World Turns
Several posts ago, I presented some numbers by Angus Maddison on the evolution of global GDP output shares over the period 1500 to 2001 which showed that Asia’s share of world GDP declined from 1500 to about the mid 20th century but has since been rising. I decided to try and do a bit of […]
Worthwhile Canadian Initiative 
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