Category Nick Rowe
What happened in 2001:1 ?
What happened in the first quarter of 2001 that would cause BOTH: 1. A US house price bubble? AND 2. A structural change in relative prices between high-end and low-end US houses?
Short run “Speed Limits” on recovery
Mark Carney, Governor of the Bank of Canada, spoke yesterday about short run "speed limits" to economic recovery. This is a concept you don't hear very often, so I thought I would briefly discuss it. It's easily confused with the much more familiar long run "speed limits" to economic growth. And those long run "speed […]
Banks, Aggregate Demand, and Aggregate Supply
What is the relation between banks, aggregate demand, and aggregate supply? Do bad banks shift the AD curve or the AS curve? Do bad banks make it harder for fiscal or monetary policy to shift the AD curve? Some economists argue that you need to fix the banks (and the financial system) to get an […]
Canadian vs. US bank regulation?
This is a topic I do not understand at all well, but I am confident that some of our readers will. But I do hear that the myth that Canadian banks are more strictly regulated is largely…well, a myth. One colleague who used to work in banking told me he never actually met a regulator, […]
Mechanical metaphors for monetary policy
This is a post for people who find mechanical metaphors useful. And remember, any theory that can be translated into math and put on a computer (even if it doesn't need to be) has a mechanical counterpart, because a computer is a machine. I am going to use mechanical metaphors to think about different monetary […]
Zero (effectively, finally); What Next for the Bank of Canada?
So, the Bank of Canada has finally cut the overnight rate target to 0.25%, which is as low as it feels technically able to go, so is effectively zero, by its reckoning. I'm not going to discuss those technical issues on the problems with 0.00% vs. 0.25%, because it's not my comparative advantage. But this […]
An alternative universe with gold price control
Imagine you are a monetary economist, working in a central bank, and you wake up one morning and find yourself in an alternative universe. You don't realise it's an alternative universe at first, because everything looks the same. But when you get into work and go to the meeting of the monetary policy committee, you […]
Interest rate control: maybe theory was right after all?
There used to be a debate over interest rate control vs. base control of monetary policy. We always knew (at least some of us always knew) that interest rate control couldn't work in theory, but it seemed to work in practice, so eventually even the die-hard defenders of base control quietened down, or were ignored, […]
Say’s Law, Walras’ Law, and monetary policy
"Deficiencies of aggregate demand are always and everywhere a monetary phenomenon". There's an excess supply of newly-produced goods, and an excess demand for money. But what exactly does an excess demand for money mean? And what does it mean for the effectiveness of monetary policy?
Highway 61 visited – some random thoughts on a US road trip
Two weeks and 8,000 km (5,000 miles) later, I'm back home from a US road trip. Here are some random thoughts FWIW. Nothing very important, insightful, or authoritative here.
Worthwhile Canadian Initiative 
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