The Progressive Economics Forum

Gross Domestic Product (GDP) edged up 0.1% in May. Annualized output was $1,231 billion, still below the pre-crisis peak of $1,241 billion in July 2008 but well above the trough of $1,186 billion in May 2009.
Canada-US Comparison
American GDP figures released this morning indicate an annual growth rate of 2.4% in the second quarter (April - [...]

Nine days ago, I posted about private non-financial corporations accumulating cash rather than investing in Canada. A week later, the Bank of Canada’s Monetary Policy Report (MPR) noted “the relatively high level of liquidity held by the non-financial corporate sector and weak investment” (page 19).
By my count, the document expresses concern eight separate times about anemic [...]

The Macdonald-Laurier Institute, which has been leading the charge against mostly unidentified “inter-provincial trade barriers,” is now posting complaints about the “intrusive” census long form.
Are different-sized cream containers in various provinces and having to spend 20 minutes filling out a form once every couple of decades really the worst problems facing libertarians in Canada? If [...]

Over at the Macdonald-Laurier Institute, Robert Knox has tried to rebut my rebuttal of his C. D. Howe Institute paper. (I am still waiting for a rebuttal of my rebuttal of his more recent Macdonald-Laurier Institute paper.)
Knox’s post sheds light on how his side of the debate sees the issue. But I begin with the [...]

Between May and June, consumer prices decreased in both absolute and seasonally-adjusted terms. As a result, the annual inflation rate fell to 1.0%, about half what it had been at the start of this year.
One province, Manitoba, actually slipped into deflation. The Bank of Canada’s core rate edged down to 1.7%.
Monetary Policy
Inflation’s continuing decline begs [...]

For the first time in eight months, the number of Employment Insurance (EI) recipients increased in May. We already knew from the Labour Force Survey that unemployment had increased by just over 8,000 in May. It is good news that EI expanded by the same amount because it implies that those who became unemployed that [...]

My union’s contribution to the debate follows:
July 21, 2010
Hon. Tony Clement
Minister of Industry
235 Queen Street
Ottawa, Ontario
K1A 0H5
Dear Minister Clement:
I write to ask you to reverse two recent decisions that threaten to undermine the quality and quantity of data produced by Statistics Canada.
First, making the long-form questionnaire optional in the upcoming census would reduce the reliability [...]

There seems to be a consensus that the Bank of Canada will raise its target interest rate tomorrow. I thought that last month’s rate hike was premature, so I see no reason for another hike this month.
The argument for higher interest rates is that they are needed to ward off future inflation (even though inflation [...]

There has been a persistent drumbeat in the American business press about corporations accumulating cash. The argument is that, while corporations are making solid profits now, they are not investing in the US for fear of anti-business policies in the future. Obama has allegedly spooked corporate America into hoarding cash rather than investing.
To test that [...]

Whenever the stock market falls, CNBC’s Larry Kudlow reliably blames the Obama administration’s allegedly anti-business policies. But when the market was rising on Obama’s watch, Kudlow generally did not talk about it.
On tonight’s show, he took a different tack. He repeatedly asserted that the market has recently rallied not only on strong corporate profits, but also because [...]

The front page of today’s Globe and Mail (Ontario Edition) proclaims, “Supercorp is dead.”
The story goes on to note, “many government insiders have suggested that opponents of a potential deal got too much of a head start on framing the issue.” Indeed, this blog got a head start framing the issue back in December, when [...]

The notion that tariffs caused the Great Depression has been repeatedly invoked in opposition to allegedly protectionist policies and to press ahead with deregulatory “free trade” deals. Also, the current collapse of international trade is sometimes cited to suggest a rising tide of protectionism today.
Yesterday, Paul Krugman had an excellent post debunking the underlying claim [...]

This morning, Statistics Canada reported that employment jumped by an incredible 93,200 in June. But the total number of hours worked actually declined. In effect, less work was divided up between more workers. (By contrast, a similar employment jump in April corresponded to a large increase in hours worked.)
Less Unemployment: A Central Canadian Story
The advantage [...]

I recently had the pleasure of making a couple of presentations on public finances in Alberta. In February, I spoke at the “Remaking Alberta” conference in Edmonton. This past week, I served on an Alberta Federation of Labour (AFL) panel in Calgary with Todd Hirsch from ATB Financial and Roger Gibbins from the Canada West [...]

A recent letter from economists nicely summarized the two main theoretical arguments in favour of the HST: “Businesses, large and small, will face lower administrative costs from complying with one sales tax system instead of two. Lower business costs, especially on capital equipment, will encourage investment and economic activity.”
Both arguments make sense in a stylized [...]

Following a strong increase in March, Gross Domestic Product (GDP) decreased slightly in April. Output edged down in both the goods-producing sector and the service sector.
Annualized output stood at $1,229 billion in April, compared to a pre-crisis peak of $1,241 billion in July 2008 and a trough of $1,186 billion in May 2009. We are [...]

Brian Lee Crowley used to run the Atlantic Institute for Market Studies. Through the new Macdonald-Laurier Institute, he is now (to paraphrase ZZ Top) not only bad, but also nationwide.
So far, the Macdonald-Laurier Institute has released two papers. I missed the first one in March. The second paper, released on Monday, is entitled Citizen of [...]

Earlier this month, the Bank of Canada raised interest rates ahead of its original schedule to head off inflation. Some commentators are calling for further rate hikes in the near future. But today’s Consumer Price Index suggests that inflation is not an impending threat.
Adjusting for seasonal factors, consumer prices were lower in May than they [...]

I could not make head nor tail of the unsourced numbers in last week’s National Post editorial on the Canada Pension Plan (CPP):
If workers were able to take the more than $3,000 they and their employers pay into CPP on their behalf each year and invest it in a conservative private fund, at the end [...]

Today’s Employment Insurance (EI) figures for April indicate essentially no change in the number of Canadians receiving benefits or in the number filing claims.
To put these flat EI numbers in context, April was the strongest month yet of labour-market recovery. Indeed, it saw the largest percentage increase in employment since August 2002.
In one sense, today’s [...]

On Monday, Catherine Swift of the Canadian Federation of Independent Business (CFIB) was on TV expressing outrage that doubling the Canada Pension Plan (CPP) would entail mandatory contributions equal to 20% of earnings.
Her logic is that a self-employed person currently contributes 9.9% of pensionable earnings. That figure doubles to 19.8%. This argument misses a couple of [...]

On Tuesday, the Ministry of Finance released “Ontario’s Tax Plan for Jobs and Growth: Technical Paper on How the Tax Changes Affect People.” This study is an attempt to counter the Statistics Canada study released by the NDP a month ago.
Until recently, proponents were claiming that the HST will simultaneously deliver huge savings to business, [...]

Arthur Laffer had a boldly titled op-ed in Monday’s Wall Street Journal, “Tax Hikes and the 2011 Economic Collapse.” This piece has been invoked at least once every ten minutes on each subsequent episode of The Kudlow Report.
US tax rates will rise in 2011, when the Bush tax cuts expire. Laffer argues that, to avoid [...]

Warning: The following post probably does not belong on an economics blog.
Yesterday, CBC reported that Liberals and New Democrats are negotiating a possible merger of the two parties into one. It seems like everyone except Warren Kinsella has denied this report.
So, how does CBC respond? It doubles down on its original report by making Kinsella [...]

Through a series of speeches and Financial Post op-eds, former cabinet minister Maxime Bernier has been setting out an uncompromising right-wing agenda. He had Andrew Coyne applauding his proposal to freeze public spending. He had Stephen Gordon tweeting in support of his proposal to eliminate corporate taxes.
But his latest proposal has already been rebuked by Gordon [...]

Among TV financial pundits, I enjoy watching James Altucher. I have particularly appreciated his advocacy of no-nonsense quantitative easing by the European Central Bank, as opposed to the half measures unveiled so far. (My viewership has not been systematic enough to form an opinion of his stock tips.)
I was recently pleased to discover that he [...]

The Austrian School is a venerable tradition in economics, albeit one antithetical to this blog’s perspective. But it became apparent this morning that we should instead have been studying Hungarian economics.
As far as I can tell, a vice-chairman of Hungary’s right-wing governing party (not a government official) made some loose remarks about public finances being [...]

This morning’s Labour Force Survey might be described as showing a consolidation of the recent employment recovery. The number of new jobs was modest in May compared to April.
However, there was a significant conversion of part-time employment into full-time employment and of self-employment into paid positions. Both trends are positive for Canadian workers.
There were 67,300 [...]

An hilarious aspect of various inter-provincial “free trade” deals is how proponents struggle to identify the barriers they hope to remove. While there are essentially no “trade barriers” between provinces, concerns about labour mobility have a whiff of substance.
This morning, the C. D. Howe Institute released a paper by Robert Knox on “Barriers to Labour [...]

This morning, the Bank of Canada raised its interest-rate target from 0.25% to 0.5%. Yesterday’s robust GDP numbers had the overwhelming majority of economic pundits arguing that it should and would do so.
But just one week ago, when the stock market was plummeting due to the Euro crisis, most commentators and headlines suggested that the [...]