Category Teaching
The exchange rate and net exports “contribution” to growth
This post is about national income accounting, and its dangers. Reading Simon Wren-Lewis' post about Brexit and real wages made me finally decide to try to get my head clear about something I've been meaning to get it clear about for some time. I think Simon might be wrong about something (I'm not sure though, […]
Project Link update: Labour Force Survey, 1953-2017
I've updated and expanded the data archived on Project Link, my attempt to take the fragments of data published by Statistics Canada and piece them together into a coherent whole. In my post introducing Project Link, I made note of a chart I came across while putting together the headline data from the Labour […]
Equalising the twin markups in a monopolistically competitive macroeconomy
The first markup is the markup of Price over Marginal Cost, required for individual firms' profit-maximisation. This is related to the elasticity of an individual firm's demand curve. The formula is: P/MC = [1/(1-1/e)]. The second markup is the markup of Average Total Cost over Marginal Cost. Free entry and exit of firms requires a […]
Should professors tell students exactly what they expect?
Imagine, for a moment, that students acquire valuable human capital during their time at university. Imagine that the grades on a student's transcript reflect his or her level of human capital. Imagine that, every term, a professor uses examinations, term papers, and other assignments, to measure how much human capital each student has acquired over the […]
Variety and Growth
A closed economy produces only apples, using fixed amounts of labour and land. Suppose there is an exogenous increase in the number of varieties of apples produced. With a constant returns to scale technology, GDP stays the same. But if people have a taste for variety, or a variety of different tastes, people are better […]
How to write an email that will get you what you want
Most of my day-to-day social and professional interactions take place over email. It's my primary form of direct, one-on-one contact with students, colleagues, and co-authors. Consequently, my impressions of people are shaped by their emails. Are their emails polite or demanding? Clear or confusing? For good or ill, I judge people by the emails they send. Based on my own […]
AD/AS: a suggested interpretation
Many macroeconomists don't like the Aggregate Demand/Aggregate Supply framework often used in Introductory macro textbooks. Maybe that's because it isn't explained properly. So I am going to explain it my way. If you explain the AD/AS framework my way, you will see that it portrays a deep and realistic understanding of macroeconomics that is lost […]
Price Level vs Inflation Rate: semantic clarity
I write this for journalists, first year economics students, and the general (non-economist) public. Yes I'm being pedantic. But I hope it helps. I'm trying to clear up a very common confusion in how we talk about inflation. Your car has an odometer, which measures kilometers driven. And your car has a speedometer, which measures […]
From ISLM to NK Macro
Let me try it this way. This is written for macro students, and their teachers. But it's aimed at researchers too. It's about the role of money in macro models. Ignore what New Keynesian macroeconomists say about their own models. Listen to me instead. Start with the second-year textbook ISLM model. The price level P […]
Why I=S is a bad place to start doing macro, again
I was reading Philip Cross's article "The Limits of Economic 'Stimulus': How monetary and fiscal policy have sown the seeds of the next crisis". I came to this bit in the Executive Summary: "Low interest rates also depress savings and therefore investment." It is clear from the context that he is talking about the Bank […]
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