Category Teaching
Good Chart Checklist
Note: this was prepared for my ECON 3403 students, and is a list of all of the mistakes I commonly see in student charts. Please add your suggestions for things to add to this list in the comments – or steal, modify, and use for your own purposes! Good Chart Check List: Is my chart […]
Loanable Funds Redux
Stop talking about "saving". Talk instead about "demand for assets". You will be happier, and your head will be clearer. Your students too will be happier, and their heads will be clearer. Demand for assets is a thing; saving is a non-thing (a residual). Things are clearer than non-things. Saving is the part of your […]
A Simple Micro/Macro Corona Tax Model
I want something you could teach to first or second year economics students. Using tools they already have in their toolkit. MICRO Start with a Demand and Supply model of the market for haircuts. If we put a $1 per haircut tax on buyers of haircuts, the demand curve shifts vertically down by $1, reducing […]
Increased Price Flexibility is Destabilising in New Keynesian Models. (And a Price-Level Path Target is Stabilising)
Start with a very simple New Keynesian "IS" (or "Aggregate Demand") equation: y(t) = E[y(t+1)] – a[r(t)-r*(t)] The "real" (inflation-adjusted) interest rate r(t) is defined as the "one period" nominal interest rate, minus expected inflation for the following "one period". In order to stabilise output y(t), relative to expected future output E[y(t+1)], the central bank […]
Project Link update
It's past time for my annual update for Project Link, my attempt to piece together the fragments of Statistics Canada's published data into coherent time series.
Accounting Identities and the Implicit Theory of Inertia
Animals can be divided into Carnivores and Non-Carnivores: A = C + NC. Therefore, if we add some wolves to an island of sheep, the number of animals on that island will increase. It's easy to see why that argument might not be right. Wolves kill sheep. But if you didn't know that fact about […]
Robinson Crusoe and the Carbon Tax Rebate
Suppose I impose a carbon tax on Robinson Crusoe. But I give him a rebate exactly equal to the tax he pays. That tax plus rebate will have no effect on Robinson Crusoe's behaviour. He knows that if he cuts carbon by 1kg, and pays $1 less tax, his rebate also falls by $1, so […]
Inflation and the Debt/GDP ratio
I'm trying to write a simple explainer. The best way to understand how inflation affects the debt/GDP ratio is to start out with a scenario where it doesn't. Then look at ways in which the real world is not like that scenario. Here's the "No Effect" scenario: The Bank of Canada suddenly decides to raise […]
Explaining S=I: Inventories vs Adding up Individuals
It's easy to teach students the arithmetic showing that actual saving must equal actual investment (S=I). But many students (quite rightly) want more than the arithmetic. Because S=I is not intuitive, and good students want to understand the intuition. I think that most profs will try to explain the intuition by talking about inventories of […]
Keynesian Beauty Contest SRAS shocks
[I'm not fully happy with this post. I think it does an OK job of explaining SRAS shocks that the central bank accommodates. But it doesn't say what happens when the central bank does not accommodate SRAS shocks. And I would like to integrate George Selgin's analysis of SRAS shocks in Less Than Zero, which […]
Worthwhile Canadian Initiative 
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