Category The 2008-9 recession
The Bank of Canada and the Fed are facing different problems, and will make different choices
David Rosenberg has been saying ([1], [2]) that the Bank shouldn't and/or won't start increasing interest rates until the Fed does, but I don't understand the reasoning behind this conclusion. Usually, the US and Canadian economies follow similar paths and since their monetary authorities have broadly similar goals, this has resulted in broadly similar decisions. […]
Where did the unemployed manufacturing workers go?
I noted a couple of months ago that employment losses in the recession were generally concentrated in the goods-producing sector: some 350,000 jobs were lost there, and there's been little in the way of recovery. On the other hand, job losses in the services sector (about 3 times as large) were on the order of […]
Ex post and ex ante comparisons of the Canadian and US employment recessions
Today's LFS release was another piece of welcome news: some 38% of the losses in employment and in hours worked have been recovered. And I think it's time for those who predicted that Canada was not going to implode to take a bow.
When 5.0% GDP growth is better news than 5.9% GDP growth
In 2009Q4, US GDP grew by 5.9% at annual rates; the number was 5.0% in Canada. But our news was much better. Here is a graph of the contributions to GDP growth by expenditure category: US GDP growth would have been only 2.0% without the contribution of the inventory terms (which was itself a deceleration […]
If we knew then what we know now: Comparing 2009Q1 forecasts with 2010Q1 reality
In February 2009, back when columnists were confidently writing stuff like this, I wrote a post with the title "Why forecasters are predicting a short Canadian recession" explaining the narrative behind the consensus forecast. I think it's fair to say that the OMGWTFBBQ!1!!1!!! narrative doesn't look so good now – although I defy you to […]
Long-term unemployment in Canada and the US
Last September, I wrote this, in a post where I made graphs comparing the number of long-term unemployed workers in Canada and the US: The more I look at the US, the more I see unpleasant parallels to Canada's experience of the 1990's – what Pierre Fortin called The Great Canadian Slump. Even after we […]
Forecasting the Federal Deficit
I wanted to figure out what the federal budget deficit would look like when Canada eventually recovers from the recession. So I did a very crude back-of-the-envelope calculation. Then I looked at the Parliamentary Budget Office's own forecast (pdf). The PBO forecast is more pessimistic than mine. I'm still trying to figure out why.
Random Thoughts
Sometimes my brain can't concentrate on any one topic long enough to write a serious post. Or maybe I just don't know enough to give a good answer to some question I want to answer. So here is a random collection of thoughts:
Why do (bad) banks (really) matter?
I'm going to put forward two perspectives on why bad banks might be important in understanding the recession: an orthodox perspective; and a heterodox perspective.
Today’s GDI release: both GDP and the terms of trade are improving
There's been a certain amount of commentary on today's GDP release. An annualised growth rate of 0.4% for 2009Q3 is better than zero – and it's at the 80th percentile of the predictive density generated by my toy predictor – but it's not what you'd call a strong recovery. Happily, there's better news about GDI. […]
Worthwhile Canadian Initiative 
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