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Blog Profile / Worthwhile Canadian Initiative


URL :http://worthwhile.typepad.com/worthwhile_canadian_initi/
Filed Under:Business & Finance / Economics
Posts on Regator:1109
Posts / Week:6
Archived Since:April 1, 2011

Blog Post Archive

The New Mercantilists

In its search for new revenues, Ontario commissioned a government panel to examine how to wring more money out of government assets. In recent days, the panel led by TD Bank CEO Ed Clark has revealed several ideas including selling....

Old-fashioned stability, and robustness

There are two different monetary policies. The green monetary policy gives you the green AD curve, and the red monetary policy gives you the red AD curve. Both monetary policies give you exactly the same equilibrium P and Y. (You...

How to deliver tax relief for Canadian families

In the 1960s, my mother's monthly family allowance cheque paid for a week's groceries. In 2011, the median Canadian two-parent family had an income of just over $90,000. At that level of net income, a family with two children receives...

Tax cuts should deliver equity, or efficiency, or both. Income splitting does neither.

The ideal tax system reflects a compromise between two conflicting goals: equity and efficiency. Equity requires that those who are able to pay more taxes do so. It means taxing the rich and giving to the poor, in thereby reducing.....

John Cochrane's "Monetary Policy with Interest on Reserves"

I am going to give what I think is the intuition behind John Cochrane's paper (pdf), that is the subject of his recent post. (Or maybe what I'm doing is reverse-engineering his model's results.) The key result of his paper...

The federal government should not cut taxes

The federal government has announced that, once the budget is in balance, its first priority will be "to provide tax relief to hard-working Canadian families." In 2013, the federal deficit had shrunk to $13 billion. This year it may disappear...

Government Dependency - Recent CMA Building Permit Composition in Canada

Ultimately all economics is local. Ontario municipalities are in the final throes of a municipal election race and in my own community the question of municipal economic development via public sector construction spending has come up. The concern is that...

"Inflation derps" are people from the concrete steppes

Suppose I lend you $1,000, at 0% interest. But I warn you that as soon as you spend that $1,000, or lend it to someone else to spend, I will immediately make you repay the loan, or else raise the...

Where is a Kenneth Carter When You Need One?

I would imagine that the name Kenneth Carter is not well known outside of a narrow range of economic specialists and accountants working in the tax or public finance area. Kenneth Carter was appointed in 1962 by a Conservative Prime...

Sign wars, and stability, with price level targeting

Suppose, just suppose, that everyone knows that the price level will be exactly 100 in 2084. (That's 70 years from now, to keep the math simple). Because in 2084 the central bank will redeem all the outstanding notes, in exchange...

Dumb questions about forward guidance in New Keynesian models

I feel I ought to know the answer to this question. But I don't. Suppose that demand this period Y(t) depends on the interest rate this period r(t), and on the expected interest rate next period E[r(t+1)], and on a...

Paying back the loan of forward guidance

If I read Stephen Poloz correctly, the Bank of Canada will not normally be doing forward guidance in the future. But it will use forward guidance in an emergency. I do not clearly understand Steve's reasoning (see section 7 of...

The representative agent does not know what he is doing

[This is based on an informal talk I gave to Carleton students. There were first year students, and graduate students, and faculty, in the audience, which made it a little tricky.] Somewhere in Canada there is a person whose height....

Helicopters, redemption, and the target

Tony Yates is arguing with Willem Buiter about helicopter money. Willem says that helicopter money increases aggregate demand even in a liquidity trap, because helicopter money increases net wealth, because money is irredeemable. Tony says that if money is irredeemable,...

Universities as Federations

Alex Usher had an interesting post on how universities are basically conflicted between their central authorities and the interests of the assorted disciplines that make up a university. He stresses that the actual point of a university is that it...

How to test whether the LMI (LMCI) is a good indicator

The Bank of Canada calls theirs the "Labour Market Indicator". I now learn from Tim Duy (HT Mark Thoma) that the US Fed has one too, and calls theirs the "Labor Market Conditions Index". I think that LMI and LMCI...

The great tuition debate: A rejoinder

This is a response to this, which is in turn a response to this and this, which was a response to this, which was a comment on this old E-Lab post of mine. This is old, well-covered ground, so I'll...

The relation between ZLB, NGDP, QE, and G

Nothing new here. This is just a brief summary of my views: 0. I assume here that currency exists, pays 0% nominal interest, and can be safely stored at low cost. Drop those assumptions and things change. 1. If real...

How can we know if government spending is money-financed?

I have a proposal that would improve aggregate demand management. I call my proposal "money-financed government expenditure on sacrificing goats". I propose that every time the government sacrifices one goat, the Bank of Canada is required by law to increase...

Who needs the responsibility?

Twenty years ago, men and women had similar attitudes towards children - young women, on average, wanted slightly more children than young men, but the differences were nothing to speak of. Now, on the other hand.... I'm not going t...

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