Main menu:

Posts by Author

History of RPE Thought

Posts by Tag

RSS New from the CCPA

Progressive Bloggers

Meta

Recent Blog Posts

Recent Blog Comments

The Progressive Economics Forum

Archive for 'inflation'

Problematic sources of recent real wage growth

The past 18 months have seen real wages increase in Canada. (Yes, I double-checked.) Indeed, real wages have gone through two distinct phases of growth since the financial crisis hit the global economy in 2007. This may be surprising as we have been accustomed to hearing about the stagnation of real wages and the “decoupling” […]

Inflation Slump Validates Low Interest Rates

Today, Statistics Canada reported inflation of 1.1% for August, even lower than June and July. But even at this anemic level, inflation is eating up three-quarters of wage gains. The Labour Force Survey indicates that Canada’s average hourly wage rose by only 1.5% between August 2012 and August 2013. Subdued inflation and the weak job […]

Inflation Eats Up Three-Quarters of Wage Gains

Today, Statistics Canada reported an annual inflation rate of 1.3% for July. By comparison, it reports that the average hourly wage rose by 1.8% between July 2012 and July 2013. In other words, even anemic inflation is eating up nearly three-quarters of wage increases. On average, Canadian workers have eked out only a 0.5% improvement […]

Inflation Eats Up More Than Half of Wage Gains

Today, Statistics Canada reported an inflation rate of 1.2% for June, validating the Bank of Canada’s recent decision to keep interest rates low for the foreseeable future. The rationale to raise interest rates would be to curb inflation, which is already under control and well below the central bank’s 2% target. But even at 1.2%, […]

Inflation Collapse Confounds Monetary Hawks

Statistics Canada reported today that inflation collapsed to just 0.4% in April. The Bank of Canada’s core inflation rate, which excludes volatile items, fell to 1.1%. Continued low inflation does not provide a rationale to raise interest rates. Perhaps for that reason, Canadian monetary hawks have shifted their rationale for higher interest rates. In 2011, […]

Polozogistics: Nine Thoughts About the Choice of the New Bank of Canada Governor

  1. He’s Number Two: Stephen Poloz was widely acknowledged in economic and political circles as the second-best choice for the top job at the Bank of Canada. So the surprise was not that he was chosen. The surprise was, Why Not Tiff Macklem? Will someone please find out and tell the rest of us? 2. […]

Margaret Thatcher’s Economic Legacy

Here is my take from today’s Economy Lab in the Globe. To expand a bit on alternatives, my take is that the neo liberal turn at the end of the 1970s was one possible response to the stagflation crisis, which found mainstream Keynesian economics wanting. Left Keynesians such as Kalecki had long recognized that full […]

Mark Carney’s tenure and the state of monetary policy

Mark Carney’s tenure as Governor of the Bank of Canada overlaps some challenging economy history. Appointed in early 2008 just as the US housing bubble was popping, Carney took the helm in time for a financial crisis that brought the global economy to its knees. We are still living that history in terms of a […]

Prices Decline Yet Again

Statistics Canada reported today that, for a third consecutive month, consumer prices declined and the inflation rate fell below 2%. In July, the inflation rate was 1.3% and the Bank of Canada’s core rate was 1.7%. Gasoline and natural gas prices, which have been lower this summer than last, dragged down the overall Consumer Price […]

Saskatchewan’s Rising Cost of Living

Today’s Consumer Price Index provides further evidence of Saskatchewan’s rising cost of living. Among the provinces, Saskatchewan is tied for the second-highest annual inflation rate: 2.0%. Consumer prices decreased in June from May in nine provinces (all except Alberta). But Saskatchewan was tied for the smallest monthly price decline: -0.3%. Compared to the rest of […]

CPI Deflates Case for Rate Hike

Today’s report that the national inflation rate fell to 1.2% in May deflates calls for higher interest rates to reduce inflation. The central bank’s core rate was 1.8%, also below the 2% target. The other argument for an interest-rate hike was to moderate mortgage lending and the housing market. However, the federal government’s move to […]

Inflation On Target; Exchange Rate Off Target

Today, Statistics Canada reported an annual inflation rate of 2%, precisely in line with the Bank of Canada’s target. With inflation under control and renewed risks to the global economy, there is little rationale for the central bank to raise interest rates anytime soon. In fact, the Bank of Canada should now be more concerned […]

Quebec Tuition: Between a Rock and Hard Place?

In the context of student protests over Quebec tuition fees, my friend Luan Ngo has just written a very informative blog post on Quebec’s fiscal situation. While I encourage readers to read his full post, I do want to use the present space to make mention of three important points he makes: -On a per […]

Deflating the Monetary Hawks

Canada’s business press has recently been filled with speculation that the Bank of Canada may soon hike interest rates based on its somewhat more optimistic economic outlook. But today’s Consumer Price Index report indicates that there is no need to raise interest rates. Statistics Canada reported that both headline and core inflation fell to 1.9% […]

Inflation Central

Statistics Canada reported today that consumer prices edged up by 0.1% in February on a seasonally-adjusted basis, bringing the annual inflation rate to 2.6% and the core inflation rate to 2.3%. These rates are within the Bank of Canada’s target range and should allow it to keep interest rates low, which would be appropriate given […]

Inflation and Drummond

Statistics Canada reported today that consumer prices jumped in January (by 0.4% or 0.5% seasonally-adjusted), offsetting the drop in December. As a result, the annual inflation rate is now 2.5% and the Bank of Canada’s core inflation rate is 2.1%. Monetary Policy Both measures are well within the central bank’s target range, which should allow […]

Recalculating inflation: billions in savings for governments and employers paid for by workers and pensioners

The top story in the Globe and Mail today reports on something I warned about a year ago:  Statistics Canada is making changes to the way it calculates the Consumer Price Index. At that time I suspected changes to calculations of the CPI would be introduced as part of the renewal of the inflation target with […]

Lower Inflation Frees Carney’s Hand

Statistics Canada reported today that consumer prices decreased in December, lowering the annual inflation rate to 2.3%. The Bank of Canada’s core inflation rate declined to 1.9%. Tame inflation leaves room to lower interest rates. If unemployment continues to rise, the Bank of Canada should reduce interest rates to boost the economy and create jobs. […]

Economic Climate and Inequality

The December issue of the quarterly Economic Climate for Bargaining publication I produce is now on-line.  This issue has a number of pieces on issues of inequality, including: Rising inequality is hurting our economy Labour rights, unions and the 99% Canadian economy bleeding jobs; public sector cuts to intensify Recession and cuts hit Aboriginal and […]

Modest Inflation Outstrips Wages and Canada Social Transfer

Statistics Canada reported today that the annual inflation rate remained 2.9% and the Bank of Canada’s core rate remained 2.1% in November. The monthly increase in consumer prices slowed to 0.1% in November from 0.3% in October. The monthly increase in core prices slowed to 0.1% in November from 0.2% in October. Inflation remains modest […]

Inflation Targeting and the Crisis

Many long-held tenets of neoclassical orthodoxy have fallen by the wayside in the past 3 years, but perhaps one of the biggest dominos that is at least teetering precariously (if not fully tipped over) is the consensus that inflation targeting should be the exclusive focus of monetary policy.

The Inflation-Control Target

So, the 2% inflation target has been renewed as it now stands. (Take that, House of Commons Finance Committee, which is holding hearings on the issue next week.) The background report from the Bank of Canada is pretty  self-congratulatory, though it does somewhat revise the current regime to underline the point that monetary policy also […]

Mythologies: Money and Hyperinflation

In an earlier post, Marc Lee mentioned in passing the German hyperinflation episode of the 1920s. It’s remarkable that this event still holds such sway over the popular imagination despite other more recent instances of hyperinflation. Certainly, the imagery is powerful: German citizens pushing wheelbarrows full of worthless paper money around for everyday purchases, banknotes […]

Economic Climate for Bargaining

The December 2010 issue of the quarterly Economic Climate for Bargaining publication that I produce is now on CUPE’s website in both English and French. In each issue I summarize developments and trends for the economy, labour markets, inflation and wages, and also include short pieces of 1-2 pages on related topical issues.  In this issue, the focus […]

A hip hop version of the Keynes vs Hayek debate

Here’s a new take on bringing economic theory to the masses — a rap battle between Keynes and Hayek. What’s amazing about it is the amount of solid (if not plain nerdy) content this video packs into such a short time. It’s fun to watch for sure (very high production values), but you get that […]

A Tale of Two Inflations: Canada vs. Ontario

Today’s Consumer Price Index release told a tale of two inflations. The national rate decreased from 1.8% to 1.7% while Ontario’s inflation rate remained at 2.9%, the highest in Canada. Monetary Policy Of course, monetary policy should reflect the whole country. The national inflation rate decreasing to 1.7% in August begs the question of why […]

The HST and Consumer Prices

This morning, Statistics Canada reported that the implementation of Harmonized Sales Tax in Ontario and British Columbia helped drive the national inflation rate from 1.0% in June to 1.8% in July. By comparison, the Bank of Canada’s core inflation rate (which excludes tax changes and volatile items) edged down from 1.7% to 1.6%. However, annual […]

Inflation: The 1% Menace?

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 […]

Where’s the Inflation Threat?

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 […]

Inflation, Wages and Monetary Policy

This morning, Statistics Canada reported that the annual inflation rate rose to 1.8% in April. Inflation and Wages While inflation remains low, it is eating up almost all of the modest wage increases that workers have eked out over the past year. The Labour Force Survey indicates that the average hourly wage rose by 2.0% […]