Category The 2008-9 recession
Was Milton Friedman right after all???
Milton Friedman said a lot of things that were very controversial 40 years ago, but are now part of the economics mainstream. The natural rate hypothesis, and the view that monetary policy should have prime responsibility for aggregate demand and inflation, are now part of the New Keynesian orthodoxy. This shows how much Milton Friedman […]
The paradox of thrift vs the paradox of hoarding
Would a sudden fad for antique furniture cause a recession? If, like Paul Krugman, you believe in the paradox of thrift, and if you follow the remorseless logic of your mistaken model, you should answer "yes". I don't believe in the paradox of thrift, and would answer "no". There is no paradox of thrift. There […]
Is the stimulus program already being phased out?
The federal government won't be bringing its 2011-12 budget down until at least four months from now, but there's already some discussion about just when its fiscal stimulus should be phased out. The government's current line is that the infrastructure program will end on March 31 as planned, with perhaps a certain amount of wiggle […]
On the sources of Canada’s recession and recovery
The good news from the latest National Accounts release is that real GDP has recovered its pre-recession peak. In this post, I'm going to review how the Canadian fell into recession, and how it recovered.
Sectoral shifts and the Canadian recession
Last December, I wrote a post on the effects of the recession on various sectors of the Canadian economy. The main results were: The service sector was barely affected; most of the losses were in the goods sector. Within the goods sector, manufacturing took the brunt of the job losses. Of course, the losses in […]
Monetary policy as asset prices
As every economist knows, interest rates don't really exist. They are a mathematical construct derived from observed bond prices. Take a really simple example: suppose a bond (OK, a bill, if you want to be picky) promises to pay $100 one year from today. We observe that bond to be trading at a price of […]
Double-dip risks: Update
This post was written by Simon van Norden of HEC-Montréal. About a month ago I mentioned my scepticism about the high odds that some forecasters were assigning to the risks of a “double-dip” recession in the US. I summed up that post this way:
Should EI benefits be extended again?
One thing I didn't mention in the discussion of Canada's exit strategy was the question of the extension of Employment Insurance benefits. Last September, the House of Commons voted for a temporary extension in the duration of the eligibility period, and this temporary measure is set to expire next month. The US just passed a […]
On Canada’s exit strategy
In my previous post, I noted that the Canadian economy was moving towards the end of the recovery phase of the recent recession. But what exactly does that mean in terms of a shift in the government's policy stance? And just when should that shift take place?
Approaching the end of the Canadian recovery: Time to worry about productivity
After a decent string of strong numbers, the most recent data releases are pretty tepid. It would appear that the days of recovery are coming to an end.
Worthwhile Canadian Initiative 
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