Category Nick Rowe
Partial vs General equilibrium lumps of labour
Does an increase in productivity cause labour demand to increase or decrease? The answer to that question, and how we go about answering it, depends on whether we are talking about one small sector of the economy (partial equilibrium), or the economy as a whole (general equilibrium). (I was doing general equilibrium in my previous […]
Productivity, labour demand, and employment
This topic has come up a couple of times in comments on previous posts. Suppose there's an increase in labour productivity. Maybe because of improved technology. How will that affect labour demand, and employment? I'm just going to work through the absolutely standard long-run classical textbook analysis of this question, with the help of a […]
Spain, Ireland, and the US. All breaking Okun’s Law.
In my last post I noted that the US was abnormal in comparison to the other G7 countries. In all the other countries GDP fell by more than employment, so labour productivity fell. That's what normally happens in a recession. Okun's Law says so. But US GDP fell by less than employment, so labour productivity […]
US Productivity Exceptionalism
Stephen's got standards. So I'm going to steal his graphs from his last post, and write the post he could easily have written. Before you look at Stephen's graphs, ask yourself this question. How well did the US fare in the Great Recession, in terms of GDP and employment, compared to other G7 countries? Now […]
Relative grade inflation, and Operation Birdhunt
Relative grade inflation is when one professor grades easier than another professor. Or when one department grades easier than another department. Operation Birdhunt was my attempt (OK, my colleague Marcel-Cristian Voia did the actual work) to do an econometric study of relative grade inflation across departments. Birdhunt was a failure, but a noble failure.
Robots, slaves, horses, and Malthus
I think this is the model that Karl Smith has in mind. Assume robots are the same as humans. Robots can do all the work that humans can do. Robots need the same amount of energy/food to stay functioning as humans do, but robots themselves can produce that energy/food just like humans can. Robots will […]
Canadian Economic Forecasts 2011 – Make Yours Now!
Continuing the now two year old tradition, I invite you all to make forecasts for 2011. Forecasts are for the latest data available on New Year's Day 2012.
Canadian Economic Forecasts: 2010 revisited
Happy New Year everyone! Last January we made forecasts for 2010. It's now time to check how well we did. (I will do a separate post for 2011 forecasts). Commenter Mark wins this one by a mile. Well done Mark!
The Lender of Last Resort
What Paul Krugman is saying about Ireland and the Eurozone is not wrong. But he keeps missing the most important point. And it's bugging me.
Income Effects don’t really exist
I'm an expert on how non-economists think. That's because every year I try to teach 300 non-economists to think like economists. Non-economists think in terms of income effects. Economists think in terms of substitution effects. That's a stereotype that isn't 100% true, but it still contains a lot of truth. Here's how non-economists think:
Worthwhile Canadian Initiative 
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