Category The 2008-9 recession
The housing market: the oversold story of the Canadian recession
Here is what is hopefully one of the last of a once-robust breed – The Apocalyptic Canadian Housing Market Story: Judging by the latest real estate data, the Canadian housing market could scarcely be better. Average home prices are up more than 16 per cent this year, and in May they hit an all-time monthly […]
Parsing Mark Carney at third remove
There's much in this CP story that I don't understand. The thrust seems to be that Bank of Canada Governor Mark Carney is making it known that he is more pessimistic about the state of the Canadian economy. It's hard to know what to make of it all. Why is Bank of Canada's Carney raining […]
Comparing employment growth in Canada and the US over the longer term
A recurring theme in discussions about what we might expect from an eventual US recovery is that it will be long and painful. This is not entirely due to the severity of the current recession. As Michael Mandel notes, the recent drop in US employment capped a decade in which employment growth was already slower […]
Don’t borrowing-constrained households spend more of a tax cut??
One of the standard arguments against the Ricardian Equivalence Proposition is that some households are borrowing-constrained. They want to borrow and spend against their future income, but can't find anyone to lend them money. So when the government gives them a tax cut, financed by higher future taxes, the government is effectively lending them the […]
GDI and the terms of trade revisited
In an earlier post, I explained at great length how the collapse of commodity prices led to a sharp deterioration of Canada's terms of trade, and I concluded that this was the real story of why Canada was in recession: Over the past weeks and months, there have been any number of articles about how […]
Too much household debt? Again.
As far as I can tell, the Bank of Canada's Financial System Review (pdf) has basically got it right. At least in the way it is looking at household debt. Provided you ignore the aggregate numbers that make the headlines, and focus on the disaggregated numbers instead.
Too little financial innovation in mortgages?
While "financial conservatives" have been complaining about too much financial innovation, my complaint is that there's been too little. Why can't I use my house as an ATM, as long as I have sufficient remaining equity? Why can't I make positive, zero, or negative monthly payments on my mortgage, whenever I feel like it? The […]
Re-thinking the lags in monetary policy — it depends on the shock
The lag in the effect of monetary policy on output employment and inflation may or may not be a problem. It depends on the nature of the shock: whether the shock has a shorter or longer lag than monetary policy. It should not have been a problem in the current recession, where the shock was […]
Is this what the trough looks like?
Today's news brings us word that the OECD's leading indicator suggests that Canada has already hit the trough of this recession: I'm seeing lots of graphs that look like this; they're below the fold.
Oil prices, the CAD and the Bank of Canada
Apparently both Nick and I have been spending the weekend thinking about the recent run-up in the CAD and the Bank of Canada's attempt to talk it down. My take on it is based on the relationship between the exchange rate and commodity prices, and it starts below the fold.
Worthwhile Canadian Initiative 
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