Category The 2008-9 recession
The house price bounce is (mostly) real – for now
I have been checking almost daily for the Teranet-National Bank May house price data, and now it's out. Their national composite price index increased 0.72% from April to May. This confirms the less accurate and more anecdotal data we've been hearing about the Canadian housing market improving this Summer.
Risks to Canadian recovery
The Bank of Canada says it believes the recession has ended. Maybe they are right; I haven't checked, but I get the impression that their forecasting has been better than most over the last year. This doesn't mean that output and employment will immediately return to normal, of course. But it does mean, if they […]
“We were there for GM and Chrysler. Why not for Nortel?”
That's the title of Jeffrey Simpson's column in today's Globe and Mail. The realpolitik answer to that question bores me to tears, but I can think of a sensible answer based on economics. Whether or not this answer has anything to do with the the real reason for this choice is an exercise that I […]
Why the Bank of Canada should ‘rise’ interest rates
I don't want tighter monetary policy; I want looser. I don't want the Bank of Canada to raise interest rates, but I do want the Bank to do something that would cause it to want interest rates to rise. I want it to buy real assets. We have become so accustomed to thinking about monetary […]
Weird Fiscal multipliers in New Keynesian models under ZIRP
Paul Krugman has bravely and commendably been trying to understand intuitively the underlying reasons for the big differences between fiscal policy multipliers in a couple of New Keynesian models. Someone needs to do this job. (Take as read a general rant against economists who write down fancy mathematical models without understanding or explaining the results […]
Rambling thoughts on Canadian house prices and global savings gluts
This isn't a very focused post. There are two sets of thoughts bubbling through my mind this morning. The first is about Canadian house prices; the second is about global savings gluts. But the two topics are very definitely related. There is a lot of anecdotal evidence of a pick-up in at least some Canadian […]
What monetary policy cannot do, and so cannot be blamed for having done
We have learned, after long and painful lessons, that there are some good things we wish that monetary policy could do that monetary policy in fact cannot do. But we don't seem to have learned the corollary to that lesson: by exactly the same argument, there are also some bad things that monetary policy gets […]
Greenspan and his critics, again — with a Canadian twist
His critics blame Alan Greenspan for setting interest rates too low, which caused the house-price bubble, which then burst and caused the financial crisis. As I argued back in February, the critics are typically confused between interest rates that are low, and interest rates that are low relative to the natural rate. The topic is […]
Stimulus? What stimulus?
Over here, I expressed confusion at Mark Carney's reported remarks to the effect that 'whatever good news existed was caused artificially by massive government and central bank stimulus': What government stimulus? The 12-month moving average of federal government program expenditures has been falling since December. (The deficit is due to declining tax revenues.) It occurs […]
Monetary stability vs financial stability
I want to compare and contrast the pursuit of monetary stability with the pursuit of financial stability. I am talking mainly about Canada, though much of what I say applies to other countries as well.
Worthwhile Canadian Initiative 
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