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.
I used to think that the Equation of Exchange, MV=PY, was just a different way of writing the Cambridge Equation, M=kPY, with V=1/k. And of the two I preferred the M=kPY formulation, because it looked more like a money supply=money demand condition, and reminded us that V=1/k must be interpreted as desired velocity, if MV=PY […]
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 […]
I’m a Professor of Economics at Carleton University in Ottawa, Canada. I’m also a member of the CD Howe Institute’s Monetary Policy Council and the Centre for Monetary and Financial Economics.
It has been estimated that Queen Elizabeth the Second has made a pertinent comment on the weather on 245,015 separate occasion to perfect strangers, all of whom remembered the exact comment all their lives … if a random and arguably inaccurate estimate if the impending climate by one overpaid human being in a flower hat […]
I’m a professor of economics at l’Université Laval in Quebec City, Canada and a fellow of the Centre interuniversitaire sur le risque, les politiques économiques et l’emploi (CIRPÉE).
There is nothing new in the substance of this post; it is an exposition of standard monetary theory. (Though some might find the exposition interesting.) It is an open invitation for people to tell me where standard monetary theory of the effects of inflation might be wrong. It's an invitation open to all, but I […]
Roy Romanow has a new project: the Canadian Index of Well-Being. In an op-ed in today's Star , he writes: There's more to life than GDP: GDP is simply the value of all goods and services produced in a country in a given year. It was first introduced in the U.S. during the Great Depression […]
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 […]
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.
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