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 [...]
Robert F. Kennedy gave a poetic speech describing what the measure of GDP misses. While the descriptions are U.S. - specific, the issues are common to any country, and the 2 minute message, is inspiring.
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 [...]
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 [...]
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 [...]
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 [...]
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 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 [...]
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 [...]
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 [...]
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 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 [...]
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 [...]
Statistics Canada has a 3 minute video showing how data for the CPI basket are collected, weighted and compiled to create the CPI. This is a useful visual introduction to Macroeconomics for Life, Chapter 7.3.
Statistics Canada released a nice 4 minute animated video showing how GDP is calculated using the value-added approach. It begins with the definition of GDP as "The value of output less intermediate consumption plus any taxes less subsidies on products not already included in the value of output." [...]
Margaret Wente's column today on "A Liberal Landslide? Not So Fast," defends the performance of the Harper Conservative government from Krugman's implicit criticism in his "Keynes Comes to Canada" column. She notes correctly that "Mr. Krugman handily ignored the fact that Stephen Harper ran six years of deficits in [...]
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, [...]
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 [...]
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 [...]
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 [...]
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 [...]
