Category Nick Rowe
Can ALL assets be overvalued?
I was going to make the title: "Can ALL assets be overvalued? The Economist (mag) vs. Cambridge(US) vs Cambridge(UK) vs. the Austrians", but it was be too long. I saw the cover of the Economist this morning. The usual lovely picture, plus the headline "Bubble Warning; Why Assets are overvalued". I think there's a theoretical […]
The value of unfunded pension liabilities, and interest rates
The C.D. Howe Institute has released a study (pdf) on Federal government pensions, written by Alexandre Laurin and Bill Robson. The bottom line (and what hit the headlines) is that the value of the unfunded liabilities is $58 billion higher than recorded in the public accounts. So the national debt is $58 billion higher than […]
What is a “structural” deficit?
Macroeconomists like to divide an actual deficit into two components: a cyclical deficit and a structural deficit. It reflects their distinction between automatic stabilisers and discretionary fiscal policy. I don't think that distinction is as clear and useful as macroeconomists think it is. And in ordinary language a "structural" deficit is one that is hard […]
Finance as Magic
I can't get over the feeling that Finance is magic. We shouldn't be surprised if sometimes the rabbit doesn't come out of the hat, or comes out missing an ear or two. We should be surprised that the rabbit ever comes out of the hat at all.
Forecasting the Federal Deficit
I wanted to figure out what the federal budget deficit would look like when Canada eventually recovers from the recession. So I did a very crude back-of-the-envelope calculation. Then I looked at the Parliamentary Budget Office's own forecast (pdf). The PBO forecast is more pessimistic than mine. I'm still trying to figure out why.
Macroeconomics with monopolistic competition in pictures
Thanks to my daughter, and to commenters, I have now learned "Paint", and can now post a simple diagrammatic exposition of macroeconomics with monopolistically competitive firms. This may be useful in its own right, and can help readers understand the point I was making in my previous post.
AD, AS, Y, Output Gaps, Cuba, Monopolistic Competition, and Recalculation
They are all related, honest! Journalists can be excused for speaking as though Aggregate Demand (AD) and output or GDP (Y) were synonyms. Macroeconomists ought to know better, but we are often just as bad as journalists. Macroeconomists never treat Aggregate Supply (AS) as a synonym for Y. The output gap is always the gap […]
Canadian Economic Forecasts 2010. Make yours now!
Continuing the ancient (well, one year old) tradition of this blog, I am inviting all readers to make their Canadian economic forecasts for 2010.
Canadian Economic Forecasts: 2009 revisited.
Happy New Year everyone! Last January we made forecasts for 2009. It's time to check how well we did. (I'm going to do a separate post for 2010 forecasts).
Optimal Tax Theorist bleg; can 100% marginal tax rates ever make sense?
This is a bleg. I'm looking for someone who: understands optimal tax theory better than me (shouldn't be too hard); can explain it simply (may be harder). Here's the question: can it ever be part of an optimal tax system to have 100% marginal tax rates on some part of the income distribution?
Worthwhile Canadian Initiative 
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