Category The 2008-9 recession
Who is increasing their spending – debtors or creditors?
That's the question we ought to be asking right now, but I haven't seen anyone ask it, let alone answer it. I don't know the answer, but I do know it's the right question to ask.
Pre- Darwinian Macroeconomics
There are signs of economic recovery. Suppose a year from now it is clear that the economy has indeed recovered. What caused it? Was it: monetary policy; fiscal policy; or did the economy recover by itself? I don't know the answer to that question; nor does anyone else. If you have one world recovery, and […]
What is the problem that EI reform is supposed to solve?
If asked, people might say something along the lines of this Toronto Star editorial: The rolls of the unemployed in Canada continue to grow… Many or most of them won't be eligible for employment insurance (EI), due to the program's Byzantine eligibility requirements. Very alarming – especially that word "most". But how do we know […]
Money and debt
Could monetary policy have caused the recent rise in levels of debt? The obvious answer is that loose monetary policy lowers interest rates, which causes people to want to borrow and spend more, and so go deeper into debt. That answer is both obvious and wrong, as I explained in a previous post. Low interest […]
A mildly disappointing Labour Force Survey release
Well, that wasn't was we were hoping for. But even so, the past few months in which employment had gone sideways means that after 9 months of recession, employment is where it was at this time in the previous two recessions: Another series I'm watching is hours worked. It's much more choppy than employment, but […]
Sterilised, unsterilised, beggar-thy-neighbour, forex market interventions.
The Loonie has been appreciating recently. This has a number of people, including me, a bit worried. What can/should the Bank of Canada do about it?
Why did debt increase?
Updated below. I have heard the argument so many times: "Low interest rates caused people to want to borrow and spend, and that's what caused debt to increase". It's such a simple and obvious explanation; only someone with a PhD in economics could fail to understand it. Unfortunately it's also an explanation that makes no […]
A preliminary estimate for Canadian 2009Q2 GDP growth
Three months ago, I tried to construct an advance estimate for 2009Q1 GDP growth, based on the GDP releases for the first two months and the LFS release for the third month. Here is what I came up with: The mean of [the predictive density] is -6.9%, and its standard deviation is 0.5%; the interquartile […]
Canadian house prices bounce back
I just wanted to add some graphs to Nick's post. Here is the Canadian Teranet-National Bank price index plotted against the Case-Shiller US indices: And here is the breakdown by city. Once again, I'm going to take this occasion to mock the "Canada is tracking the US experience, with a lag of about two years" […]
The optimal number of things to think about
I think our minds (brains, whatever) are like a multi-product firm. We have to decide how many things to think about — how many different products to produce. We don't think about just one thing all the time; but we don't think about an infinite number of things either. There must be fixed costs of […]
Worthwhile Canadian Initiative 
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