Category Nick Rowe
The Efficient Election Market Hypothesis
I'm not displeased by the election results last night. But. Economists talk about "Market Failure" — cases where markets will not lead to an efficient (Pareto Optimal) allocation of resources, because of: market power; externalities; asymmetric information; adverse selection; moral hazard; etc. Good economists then go on to talk about "Government Failure". Just because the […]
Walras’ Law vs Monetary Disequilibrium Theory
Walras' Law says that a general glut (excess supply) of newly-produced goods (and services) has to be matched by an excess demand for some other good. But it could be matched by an excess demand of anything that is not a newly-produced good. It could be an excess demand for money. Or it could be […]
Functional Finance vs the Long Run Government Budget Constraint
(I had been planning to write this post before Steven Landsburg started a whole blogosphere argument about what taxes are for. Honest!) Functional Finance says you only use taxes if you want to reduce Aggregate Demand to prevent inflation. The Long Run Government Budget Constraint says you use taxes to pay for past, present or […]
Intelligent Government in Canada — Ian Stewart Festschrift
I have 300+ exam papers to grade, and simply don't have time to do a proper post on this. (I don't really have the breadth of knowledge required either). Anyone interested in public policy in Canada, from a mostly economic perspective, would have benefited greatly from attending the conference (organised by the Centre for the […]
Garth Turner bleg
There's a job needs doing, but I'm not the best person to do it. Because I was never that good at variances and covariances and CAPM and stuff. One of you finance guys would be much better.
Reverse-engineering the MMT model
I'm trying to keep this as simple as possible, so it's accessible to second-year economics undergraduates. Many theoretical papers I read are full of impenetrable (to me) thickets of math. So I reverse-engineer the model. I try to figure out what the underlying model must be in order for the paper's conclusions to make sense. […]
Is it moral to vote?
This question should perhaps better be left to Robin Hanson, who understands Aumann's agreement theorem better than me. (Maybe he's already addressed it, but a quick search of his blog didn't find it.) I am almost certainly muddled somewhere. But here goes anyway. Suppose there's an election between two parties. Or a vote between two […]
Excess supply, excess demand, and search
Take a simple supply and demand model of a competitive market. Look at the blue lines in my picture below:
A monetarist search model of keynesian unemployment
This post was inspired by Steve Williamson's post on Roger Farmer. Steve has a model(pdf) that he sees as capturing the essence of what Roger is saying. Leave aside the question of whether Steve's model is a good interpretation of Roger. I like Steve's model because it's clean and simple. But Steve's model is a […]
The Canadian Taylor Curve — and the direction of causality
This is from my Carleton colleague Hashmat Khan: There is a strong negative relationship between investment and unemployment in Canada. The data on private business fixed investment from the past 35 years confirm it. The measure of investment is non-residential structures + residential structures + machinery & equipment. The correlation between investment (relative to GDP) […]
Worthwhile Canadian Initiative 
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