Over at the blog of the Institute for New Economic Thinking, Ottawa U professor Mario Seccareccia has given an interview titled “Greece Shows the Limits of Austerity in the Eurozone. What Now?” The interview can be read here.
Read moreThe labour market is in much worse shape than the official 7.3% unemployment rate implies. The latest evidence for this proposition is today’s miserable report on employment and earnings from Statistics Canada. Further to Andrew Jackson’s post on today’s release, most media coverage of this report focuses on year-over-year measures of growth in hourly wages and weekly wages. And on […]
Read moreThrough 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 and is unlikely to […]
Read moreWhile some prices rose slightly and others fell slightly between July, August and September, the total Consumer Price Index has remained exactly the same through these months. The annual inflation rate declined by 0.9% in September, tying July for the largest rate decline since 1953. All provinces but Saskatchewan now have negative inflation. While the main story continues to be […]
Read moreThis morning’s consumer price figures for August are reminiscent of July. The annual Consumer Price Index decline was 0.8% (compared to 0.9% last month.) With the exception of July, August was the sharpest drop in consumer prices since 1953. In both July and August, eight of ten provinces posted negative inflation rates. The only province with positive inflation in both […]
Read moreIn July, the Consumer Price Index posted an annual decline of 0.9%, the most negative inflation rate since July of 1953. This decline is troubling not only because it is larger than last month’s decline, but also because it is more widespread. Recent decreases in inflation have mainly been driven by lower gasoline prices in 2009 compared to 2008. This […]
Read moreDeflation is no longer a spectre, but a reality for Canada. This morning, Statistics Canada reported an inflation rate of minus 0.3%. Inflation turning negative was widely predicted, including in my previous comments on the Consumer Price Index. Although not surprising, today’s news has important implications for the debate about further fiscal stimulus. Statistics Canada noted that June 2009 was […]
Read moreThis morning’s Consumer Price Index data reveals that the national inflation rate fell to 0.1% in May. Four provinces – Alberta, New Brunswick, Nova Scotia, and Prince Edward Island – posted negative inflation rates. The supposed risk of continuing fiscal and monetary stimulus too long is that they could propel accelerating inflation. The Finance Minister and Bank of Canada Governor have […]
Read moreToday’s Consumer Price Index provides an important reminder that, despite expansive monetary policy from central banks and perceived “green shoots†in the economy, deflation remains a more serious risk than rising inflation. In April, the national inflation rate fell to 0.4%. Four provinces – Alberta, Nova Scotia, New Brunswick and Prince Edward Island – posted negative inflation rates. While falling […]
Read moreA lot of people I meet these days ask about the risk of a future surge in inflation, or even a return to “hyperinflation,” as a result of government’s efforts around the world to stimulate spending and demand — in part through large deficits, and in part through very loose and unorthodox monetary policy (including, in some jurisdictions, “quantitative easing”). […]
Read moreThe Consumer Price Index decline in March confirms that deflation remains a greater risk than rising inflation. The annual inflation rate fell to 1.2% nationally and turned negative in one province, Prince Edward Island. The recent revelation of the first annual decline in American consumer prices in half a century underscores concerns about deflation. While falling prices benefit consumers with […]
Read moreThe increase in consumer prices between January and February suggests that the threat of deflation may be less imminent than it appeared during the previous five months of falling prices. Whereas three provinces actually posted negative inflation rates in January, all posted positive inflation rates in February. Today’s Bloomberg report begins by noting that this data “may ease pressure on […]
Read moreIn the last few months, governments here and abroad have made every effort to “turn on the taps” of credit — in Canada, we have more than half a dozen such programs (and counting) under the banner of the EFF (Extraordinary Financing Framework), including (but not limited to): the IMPP (InsuranceMortgage Purchase Program); the CSCF (Canadian Secured Credit Facility); the […]
Read moreConsumer prices fell by 0.1% between December 2008 and January 2009, reducing the annual inflation rate to 1.1%. Prince Edward Island joined the other two maritime provinces in having the dubious distinction of a negative inflation rate. This decline mainly reflected falling gasoline prices. Lower fuel costs were partly offset by higher mortgage-interest costs due to higher real-estate prices than […]
Read moreI’ve just read an excellent paper “From Financial Crisis to Depression and Deflation” by Hansjorg Herr of the Berlin School of Economics, circulated by the Global Union Research Network (but not yet posted to their web site.) Herr argues that demand deflation is inevitable in a downturn like the one we are in, but this becomes really dangerous for the […]
Read moreI don’t usually read (or cite) Sherry Cooper, chief economist for BMO Capital Markets, but in a recent article she was on the money: Layoffs and reductions in hours worked have been accelerating in recent months and cover firms in virtually every sector of the U.S. economy. The same has been true in Canada, but to a much lesser degree […]
Read moreToday’s Consumer Price Index suggests that Canada is lunging toward deflation. The annual inflation rate plummeted to just 1.2% in December, 2.2% lower than only three months ago. If this pace continues, the national inflation rate will turn negative in the next few months. Two provinces, Nova Scotia and New Brunswick, already recorded negative inflation rates in December. Of course, […]
Read moreThe Bank of Canada did not cut its target interest rate enough this morning, leaving it a full percentage point above the US central bank rate. As I argued last week, the Bank of Canada should have matched the American Federal Reserve and cut to zero. Astonishingly, the Bank of Canada’s press release acknowledges that we are headed for deflation: […]
Read moreIn November, prices fell for a second consecutive month and annual inflation fell for a third consecutive month. The Consumer Price Index declined from 3.5% in August to 3.4% in September, 2.6% in October, and 2.0% in November. A few more months of decline could turn this annual rate negative. While steadily falling prices would be a boon to individual […]
Read moreI highly recommend “The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis” by Graham Turner. “Graham Turner is one of only a handful of economists to understand the roots of the current financial crisis, its implications for all of us and crucially what should be done now. I strongly recommend you read this book.” —Larry Elliott, Guardian “A […]
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