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So far ajc has created 21 blog entries.

Federal Reserve U-Turn and the Phillips Curve

In February 2019, the US Federal Reserve stopped worrying about inflation that might come from economic growth (and reduced unemployment) and instead focused on the possibility of stagnant growth. That shift in focus led the Fed to stop talking about raising interest rates to reduce inflation, and instead talk [...]

Federal Reserve U-Turn and the Phillips Curve2020-05-10T09:57:21-04:00

Arguing for Free Trade in a Post-Trump World

Anti-trade and anti-globalization positions helped elect Donald Trump, and economists' traditional arguments for free trade are being ignored. In fairness to the anti-traders, the outcomes of extended trade (especially with China) have left many workers in manufacturing worse off. In teaching about the gains from trade, how do we [...]

Arguing for Free Trade in a Post-Trump World2020-05-07T15:52:50-04:00

More Potato Chip Deficit Forecasts

Justin Trudeau and the Liberals were elected on an economic platform that included running deficits to finance infrastructure during a period of slow growth and low borrowing costs. In a Globe & Mail column, Jeffrey Simpson reviews the causes of slow growth, and recognizes the legitimate economic argument for federal [...]

More Potato Chip Deficit Forecasts2020-05-09T10:38:48-04:00

Do Higher Minimum Wages Benefit Workers AND Employers?

Andrew Jackson, of the Broadbent Institute, argues in a Huffington Post article that the recent increase in Alberta's minimum wage to $12.20 (on a path to $15 in 2018) not only benefits workers, but also employers. He presents the cons and pros of minimum wages, including a claim by the [...]

Do Higher Minimum Wages Benefit Workers AND Employers?2020-05-09T10:37:28-04:00

“But I Studied Hard … and Only Got a C!”

In the Spring 2016 issue of The Teaching Economist, William McEachern describe a familiar office hours scenario following the first term test of introductory economics: They tell us they “studied hard.” They came to class, took notes, read the textbook, and highlighted key passages. They even reread class notes [...]

“But I Studied Hard … and Only Got a C!”2020-05-09T10:49:44-04:00

The High Cost of Driving: Putting A Price on Traffic

Here is an interview CBC did with Prof. Chris Ragan of McGill, Chair of the EcoFiscal Commission. There are great issues of negative externalities, and how people ignore the opportunity costs of being stuck in traffic. The question is, is it worth paying tolls if it buys us more time [...]

The High Cost of Driving: Putting A Price on Traffic2020-05-09T10:54:01-04:00

Will Mobile Phone Rates Fall as Shaw Buys Wind Mobile ?

The Globe & Mail reported that Shaw Communications is buying Wind Mobile in  a $1.6 billion deal. Primarily a cable and telecommunications company, Shaw wants to compete in the mobile phone business.  Share prices of the big 3 wireless provider -- BCE, Rogers, Telus -- fell on the news, anticipating that [...]

Will Mobile Phone Rates Fall as Shaw Buys Wind Mobile ?2016-05-03T14:45:49-04:00

How Elasticity Helps AirBnB Owners Make More Money

The Toronto Star reported on a startup called Beyond Pricing that is helping AirBnB owners increase revenues from their short-term rentals by figuring out the highest price they can charge. The company using a dynamic pricing algorithm like those used by airlines and hotels that raises prices when demand [...]

How Elasticity Helps AirBnB Owners Make More Money2020-05-09T10:55:29-04:00

Bell Pays $1.25 million Penalty for Fake Online Reviews

The Globe & Mail reported in October that "BCE Inc. has agreed to pay a $1.25-million penalty after the company's staffers wrote online reviews of Bell products and services without disclosing their ties to Bell. It is the first penalty of its kind imposed by the Competition Bureau in response [...]

Bell Pays $1.25 million Penalty for Fake Online Reviews2016-05-03T14:46:14-04:00

The Demise of Black’s Photography

After 85 years, Black's Photography, one of the largest Canadian retail photography chains, went out of business in August 2015. As the Globe & Mail reported, Black's was a "victim of a fast-changing digital industry and high-quality smartphone cameras and Instagram posts." This is a classic example of Joseph Schumpeter's [...]

The Demise of Black’s Photography2015-12-12T22:43:36-05:00

Who Would Buy a Bond with a Negative Yield ?

The recent discussion by Stephen Poloz of charging negative interest rates to chartered banks on their deposits at the Bank of Canada was preceded earlier in the year by stories about negative interest rates on bonds in Europe. If February 2015, a Globe & Mail story reported on negative [...]

Who Would Buy a Bond with a Negative Yield ?2020-05-09T13:08:45-04:00

Plunging Oil Prices as a Positive Supply Shock ?

A year ago, oil prices had plunged from $110/barrel to around $70/barrel. There was much concern then, as there is today with oil prices under $40/barrel, about the effects on the Canadian economy. The Globe & Mail ran a story "Oil's Plunge to Buoy Global Economy: A $1.3 Trillion [...]

Plunging Oil Prices as a Positive Supply Shock ?2020-05-07T16:08:42-04:00

Krugman Welcomes Keynes to Canada

Paul Krugman's column on "Keynes Comes to Canada" is a treasure-chest of Canadian policy issues. His focus is on the Liberal Party's platform position to run budget deficits for a few years to finance infrastructure investment -- “Interest rates are at historic lows, our current infrastructure is aging rapidly, [...]

Krugman Welcomes Keynes to Canada2020-05-07T16:10:40-04:00

What Determines the Value of the Loonie ?

The Globe & Mail reported that the value of the Canadian dollar fell on foreign exchange markets, after the Bank of Canada forecasted slower GDP growth and lower oil prices. This is a classic reaction of the Canadian dollar to changes in two of the main forces affecting exchange rates [...]

What Determines the Value of the Loonie ?2015-10-30T19:46:35-04:00

Does Canada Need a Few Small Deficits ?

Chris Ragan has an excellent column - "A few small deficits may actually be just what Canada needs" - in yesterday's Globe & Mail. [Also excellent because it illustrates most of the key policy implications discussed in Ch 12 (Spending Others' Money: Fiscal Policy, Deficits, and National Debt) of Macroeconomics for Life [...]

Does Canada Need a Few Small Deficits ?2020-05-07T16:09:25-04:00

Uber Teaching Moments Galore!

After meeting an Uber developer at a University of Waterloo hackathon, a student posted a paper - "The Effects of Uber's Surge Pricing - A Case Study" - by Jonathan Hall (Head of Economic Research, Legal and Public Policy at Uber Technologies), Cory Kendrick (Data Scientist at Uber Technologies) and Chris Nosko [...]

Uber Teaching Moments Galore!2020-05-09T11:18:01-04:00

Economic Fables

I started reading Ariel Rubinstein’s Economic Fables.  Before reading his description below of what an economic model is, keep in mind that he is one of the world’s foremost game theories, and a former President of the Econometric Society. Economic theory formulates thoughts via what we call “models." The word [...]

Economic Fables2020-05-09T11:27:28-04:00