Category Macro
The CPI and other asset prices
Returning from a long weekend's canoeing, I remembered one of the main reasons I am a sticky-price macroeconomist. I checked to see if the economy had imploded while I was not worrying about it. April CPI up 0.1% from March; CAD/USD down about 2%; CAD/EUR up about 2%; TSX down around 3%; S&P500 down around […]
What is a “reserve currency” anyway?
I just realised I don't really know; that's why I'm asking. With the Eurozone troubles, the US dollar has been rising against the Euro. That's not so surprising. But the US dollar is rising not just against the Euro; it seems to be rising against other currencies as well, like the Canadian dollar. And gold […]
The orthodox loss of faith
I think we are witnessing the biggest silent shift in macroeconomic thought since the Second World War. For 70 years we have taught, and believed, that we would never again need to suffer a persistent shortage of demand. We promised ourselves the 1930's were behind us. We knew how to increase demand, and would do […]
L’Europe et l’alchimie monétaire
Cet article nous est envoyé par Guillaume Nolin, qui participe régulièrement ici sur WCI. Les événements survenus en Grèce au cours des derniers jours nous forcent à nous questionner sur la précarité de notre situation économique. L’image d’une Grèce prodigue, sorte de cigale en préretraite manifestant violemment pour conserver des acquis sociaux illusoires, est certes […]
The Eurozone lender of last resort?
OK. Let's simplify this whole Eurozone mess. Central banks do two things:
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 […]
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 […]
Units
Nothing really new here (for most economists). Just the old story re-told. Back in high school, I figured out something neat about units. Both sides of an equation had to have the same units. Obvious now, but I thought it was neat, because it let me "cheat" on exams. If I was too lazy to […]
A question for Modern Monetary Theorists
What, in your opinion, is the shape of the Long Run Phillips Curve? Supplementary: if you use the words "full-employment" in your answer, can you do your best to explain what you mean by this. (This is not a "gotcha!" question. I know that's a tall order, because it's not always easy to come up […]
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 […]
Worthwhile Canadian Initiative 
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