Most environmentalists would probably say no. But I’m going to make the opposite case here. The thing we need to remember about economic growth is that over long periods of time the products we consume and the processes by which we produce them change dramatically. As my old prof Dick Lipsey pointed out repeatedly, we have a higher standard of […]
Read moreAh, the confluence of the events! The tabling of a “prudent†federal budget for uncertain times, followed a week later by news of slowing economic growth. Of course, rumors of the economy’s imminent decline may be greatly exaggerated, given January’s jobs report and trade data. But let’s carry forth with the economic accounts data. Earlier, Erin and Toby drew […]
Read moreThe latest from the Fraser Institute concludes that BC’s 2001 tax cuts spurred economic growth, investment and all other good things. To their credit, this is a far more sophisticated analysis than one usually sees from the Fraser. Rather than relying on the in-house talent, they farmed the work out to University of Alberta economist Bev Dahlby, known for advocating […]
Read moreStatistics Canada released an interesting but utterly misleading technical paper last week on Canada’s supposed “Reversal of Fortune.” They examined Canada-U.S. comparisons in national income (a concept that is subtly but importantly different from GDP, as I’ll explain in a minute), and decided that Canada has become the star economic performer of the continent. Since 2002, our real national per […]
Read moreOver at Worthwhile Canadian Initiative, Stephen Gordon has assembled an interesting comparison of the current expansion vis-a-vis the previous two (roughly, the 1980s and the 1990s), benchmarking performance on a number of key indicators. One of his conclusions is rather unusual: he finds strong real wage growth over the past four years. This is contrary to the numbers I have […]
Read moreHow Denmark Paved Way To Energy Independence Thirty-Year Plan Uses Wind, Taxes, Pig Fat; Consumers Pay More By LEILA ABBOUD April 16, 2007; Page A1 HORSENS, Denmark — Nothing goes to waste in the new Danish Crown slaughterhouse in eastern Denmark. Even the inedible fat of 50,000 pigs killed and processed here each week is used to heat the plant. […]
Read moreThe first cut at 2006 GDP data for the provinces is out today from Statscan. What blew me away was Alberta, with real GDP growth of 6.8%. That is not a typo, so let me repeat, 6.8%, as in, Chinese style growth, and more than double the national average of 2.7%. And I thought the past two years were blistering […]
Read morePatrick Grady, a former senior Finance official and leading mainstream economist, has weighed in on the Conference Board’s estimate of TILMA’s economic benefits. He cites the paper that Marc and I wrote and reiterates the points first made on this blog. He also notes that the Conference Board’s own forecast of BC’s economic-growth rate does not seem to reflect its […]
Read moreSome notes by yours truly on the BC economy, based on a presentation I gave this past weekend: As a provincial economy, BC is relatively small and resource-dependent. Over past decades, there has been a growing divide between the “two economies†of Greater Vancouver (plus the provincial capitol in Victoria), with a more diversified and service-oriented economy, and the rest […]
Read moreYesterday, the CCPA released a study on inequality filled with statistics about how life has changed for families with children. John Ibbitson shrugs his shoulders and responds with a polemic. He provides some “balance” by trashing right-wing think tanks, too, but in typical Ibbitson fashion provides not a shred of evidence for anything he says. Here’s the column and some […]
Read moreThis article below from the Toronto Star looks at efforts to create a Canadian Index of Welfare (CIW). Some folks would like to heave GDP out the window in favour of something that looks like a CIW, but this would be a mistake. A CIW could add to our understanding, but it could not replace GDP. While GDP has many […]
Read moreMy note on the weak investment spending of Canadian businesses earlier this week sparked several comments, including one from me on the methodological problems encountered in trying to measure “real†investment effort. Here’s some more grist for the mill of how we understand “nominal†versus “real†business investment. Point 1 is empirical, and Point 2 is more theoretical. 1. Capital […]
Read moreEllen Gould has noted that the Conference Board’s report projects gains for industries that are explicitly exempted from TILMA: utilities, energy, mining, forestry, and fishing. The Conference Board’s analysis was based on a “draft negotiators’ text” (see page 39). However, the actual agreement wholly or partly exempts the industries listed above (see pages 19-20 and 22). These exempt industries could conceivably still benefit from lower […]
Read moreThe Conference Board estimates that TILMA will add $4.8 billion to British Columbia’s economy. Even if one accepts the Conference Board’s assumptions, this figure should be $2.4 billion (as explained below). However, some of these assumptions are highly questionable. The Conference Board argues, “The commercial services and wholesale and retail trade industries will benefit from [TILMA]. Increased trade liberalization will […]
Read moreThe Government of British Columbia has finally released the Conference Board study projecting that TILMA will add $4.8 billion to the provincial economy. Seeing the study’s methodology (or lack thereof) makes this projection seem even sillier than Marc and I had suggested. The Conference Board “scored†eleven industries in seven regions on the following arbitrary scale of TILMA’s speculated impact […]
Read moreHere are two items that go together well. First, here is the most recent tax cut talk from Finance Minister Jim Flaherty, as quoted by the Globe and Mail: “I can assure you that our government is by no means finished in our efforts to improve our tax system for the benefit of Canadian families and businesses,†the Conservative […]
Read moreToday’s Daily from Statscan points to a new short review of Canadian R&D spending, 2002 to 2006. They report: Spending on industrial research and development (R&D) will edge up this year, according to reported intentions. Canadian companies will spend an estimated $14.9 billion on R&D, up 1.3% from the preliminary figure for 2005. Manufacturers will spend an estimated $8.3 billion, […]
Read moreThat sinking feeling is coming on. The US economy is slowing and several well-respected economists have made their call. Leading off, Paul Krugman: The key point is that the forces that caused a recession five years ago never went away. Business spending hasn’t really recovered from the slump it went into after the technology bubble burst… Also, the trade deficit […]
Read moreMark Weisbrot of the Washington, DC-based Center for Economic and Policy Research looks to recent political developments in Latin America, and sees the end of an era of neoliberal policies. His article, forthcoming in the International Journal of Health Services, begins: The changes that have taken place in Latin America in recent years are part of an epoch-making transformation. To […]
Read moreThe Globe and Mail’s Neil Reynolds does a hatchet job on Sweden. Alas, conservatives have called for the end of the Swedish welfare state for a long time, and this smear job may postpone the day that Canadians start looking at Sweden as a model we may want to emulate. Truth be told, I have never been to Sweden (though […]
Read moreNeoclassical economics, when looking at the labour market, plots its supply and demand curves, with all of their loaded and unrealistic assumptions, and finds an equilibrium wage and employment. Then it finds that anything added on to this simplistic and flawed model – taxation, unions, minimum wages – perturbs that equilibrium. Therefore those things must be bad! A new paper […]
Read moreFrom his Project Syndicate column: Most academic economics rely on concepts laid down at the beginning of the twentieth century by the British economist Alfred Marshall, who said that “nature does not make leaps.†Yet we economists find ourselves increasingly disturbed by the apparent inadequacy of the neo-Marshallian toolkit that we have built to explain our world. The central bias […]
Read moreWriting in the Toronto Star (link lost), economists Arthur Donner and Doug Peters reflect on economics, employment and inequality: The Distorted Priorities of Mainstream Economics Arthur Donner and Douglas Peters, May 2006 There has been a monumental shift in mainstream economics over the past forty years. When we studied economics in the 1960s, economists and public officials who had an […]
Read moreIf you listen to the Fraser Institute or like-minded think-tanks on the right, high taxes kill incentives to work and invest. They argue that Canada needs to lower its taxes in order to produce higher rates of economic growth. By their logic, the Scandinavian countries, all of whom have levels of taxes relative to GDP substantially higher than Canada’s, ought […]
Read moreMatthew McCartney, also writing in the Post-Autistic Economics Review, probes why economists know so little about economic growth when it comes to empirical research, and comes away skeptical about the merits of cross-country growth regressions: This paper is concerned with how economic growth is analysed by economists. Over the last fifteen years an extremely common method has been through cross-country […]
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