The Progressive Economics Forum

The political crisis around the Caisse’s dismal performance continues to haunt the political scene in Québec. Urged to explain how up to 40 billion dollars might have been lost during his management Caisse ex-director Henri Paul Rousseau largely blamed the economic and financial crisis, factors beyond his control. Asked why and how the Caisse ended [...]

There has been much talk, of late, about the ineffectiveness of conventional monetary policy — i.e., lowering the target for the overnight interest rate to incite borrowing and hence economic expansion — and the need for monetary authorities to consider something more dramatic, like so-called “quantitative  easing” — the active buying of government debt and [...]

The Canadian Bankers’ Association must be happy.  They’ve somehow managed to convince pundits south of the border, and even a few here who really ought to know better, that they’ve somehow been able to weather the economic and financial storm with absolutely no help from the federal government.
The most recent evidence for this position is [...]

Well. Finally. Some clarity. Sort of. Earlier this month, Bank of Canada governor Mark Carney made appearances before the House of Commons Finance Committee and the Senate Banking, Trade and Commerce committee to discuss the Bank’s latest monetary policy report . Transcripts are now available and with a little reading-between-the-lines, they tell us a [...]

What is going on out in Canada’s wild and woolly financial system? First, the Bank of Canada convinces the Department of Finance and the Conservatives that it “needs” expanded powers to purchase a broader range of securities (see my earlier post for why their arguments are not very convincing). And then, earlier [...]

Over the years, federal budget legislation has acquired the feel of U.S. omnibus bills (the Farm Bill is probably the quintessential example). To some extent, this is to be expected. Ever since the “disastrous” Trudeau era, the imperial Department of Finance has not-so-quietly re-asserted its domain over the federal bureaucracy.
One manifestation of Finance’s power [...]

The asset-backed commercial paper (ABCP) debacle: who is to blame?  According to the National Post , it’s everybody and nobody.  I find myself in unusual agreement.  While I don’t wish to see likely criminals let off the hook, a better approach out of this mess is to change the rules of the game.

Last August, the Canadian market [...]

I was on CBC’s The House this weekend on the US economy and its implication for Canada and the federal budget. My co-commentator was Chris Ragan, of McGill and CD Howe. We are in general agreement as far as diagnosis goes, though he seems more optimistic than I about Canada’s ability to stay clear of [...]

Randall Wray, in a paper for the Levy Institute, provides a nice history of the sub-prime debacle, and connects it to the economics of Hyman Minsky (whose name has resurfaced in the wake of the current connundrum) in Lessons from the Sub-prime Meltdown:
This paper uses Hyman P. Minsky’s approach to analyze the current international financial [...]

Where is Finance Minister Flaherty? by Doug Peters and Arthur Donner. (from today’s Toronto Star)

 
(Doug Peters is the former Chief Economist of The Toronto-Dominion Bank and was Secretary of State (Finance) from 1993 to 1997. Arthur Donner, a Toronto economic consultant, began his career as an economist at the Federal Reserve Bank of NewYork.)
 
“The credit [...]

The business pages are covering this rather arcane issue more and more intensively. The Canadian market for so-called non bank asset backed commercial paper or ABCP has more or less frozen up, leaving some $40 Billion in stranded assets. Much of this seems to be held by large pension funds and other large institutions, with [...]