Category Stephen Gordon
DSGE and me, or Why I ended up being an applied econometrician
I've never used Dynamic Stochastic General Equilibrium (DSGE) modeling techniques for pretty much the same reasons that Noah Smith outlines. I keep meaning to write a post about my misgivings about DSGE, and it appears now is the time. This is going to be a pretty technical and wonkish post, but there's really no way […]
What is going on with the Bank of Canada’s balance sheet?
From zerohedge: Mark Carney Leaves Canada With 'Stealth QE' Rising At Fastest Pace Since 2009: As Mark Carney steps aside from his role at the Bank of Canada to undertake all manner of easy money in the UK, we thought a reflection on the 'stealth' QE that he has been engaged with, very much under […]
What should a central bank do when producer and consumer prices diverge?
In this post, Nick looked at this graph and made the following comment: In a counterfactual world, where the Bank of Canada was supposed to be targeting the level path of NGDP to follow that 5% trend line, what would we say? We would say that monetary policy was a little too loose in the years […]
How much revenue can the Quebec government generate by increasing tax rates on high earners?
The newly-elected Parti québécois government wants to (among other things) eliminate the 'health tax' introduced in the 2010 budget and make up the shortfall by introducing two new tax brackets at the top end of the income distribution: 28% for taxable incomes above $130,000 31% for taxable incomes above $250,000 The current top Quebec rate […]
My trip to see the oil sands
Last month, the Canadian Association of Petroleum Producers organised a field trip for a group of economics professors to see a couple of the oil sands installations. I once wrote somewhere that the oil sands are the most important Canadian economic fact of our time, and I jumped at the offer to join the tour. […]
A preliminary estimate for Canadian 2012Q2 GDP growth
The May GDP number came out today, so it's time for my quarterly exercise in trying to come up with a preliminary estimate for quarterly GDP growth a month before Statistics Canada makes its first announcement. As regular readers will no doubt be weary of being reminded, the estimate is based on the GDP numbers […]
Behavioural economics and the Lucas critique
There's been a few recent posts on the Lucas critique in the economics blogosphere (ex: Noahpinion), so I'm going to take advantage of this to make a point that I don't recall seeing made elsewhere. (If I'm re-inventing the wheel here, please let me know in the comments and I'll add the appopriate attribution.) A […]
Worrying about the Canadian housing market, Part 3: Risks of default
Concerns about the housing market are not really about what happens to the market for houses per se; its role as a driving force for the recovery was done long ago. The real concern is the risk is a US-style financial crisis. I think it's a valid concern, but I don't think it's very likely. UWO's […]
Worrying about the Canadian housing market, Part 2: The effects of higher leverage
In a previous post on the housing market, I noted that we were unlikely to see the sorts of interest rate increases that would generate increases in mortgage payments of the size we saw in the early 1980s (up to 60%). And it's a good thing too, because most new homeowners are not as able […]
Worrying about the Canadian housing market, Part 1: Higher interest rates
Like Nick, I've been thinking and worrying about the Canadian housing market, but not blogging about it. I've decided that it's worth putting some points out for discussion on the topic, if only because it's something we should be talking more about. I've broken it down to three separate posts: the second is here and […]
Worthwhile Canadian Initiative 
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