Home/Macro Chapter 12

Bank of Canada Cuts Rates as Coronavirus Delivers ‘Negative Shock’

The Bank of Canada cut interest rates dramatically in March 2020 in attempting to counter the depressing effects of COVID-19 on economic activity. But the Bank makes clear that monetary policy will not be enough and the government must respond with aggressive fiscal policy spending. [...]

Bank of Canada Cuts Rates as Coronavirus Delivers ‘Negative Shock’2020-05-09T16:49:06-04:00

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

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

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

A Balance Sheet Recession

Richard Koo (Chief Economist, Nomura Research Institute) did a 10 minute video in 2010 for the Institute for New Economic Thinking (INET) that is the clearest and most succinct, yet comprehensive, explanation of balance sheet recession.  I have shown this video 10 times in different courses, and students are spellbound [...]

A Balance Sheet Recession2020-05-09T11:22:09-04:00