Down south, the Obama administration is in a dangerous game of chicken with Republican congressional leaders, who are cynically holding the US economy hostage in order to impose a radical agenda of spending cuts. Obama has seemingly bought into the rhetoric of cutting debt, rather than focusing on the real US problem of unemployment. Yet, even his foolish offer to […]
Read moreJack Layton unveiled the NDP’s policy platform today. Among other things, it promises to eliminate the deficit (i.e. balance the federal budget) within four years. I’m not sure it should. Several years back, I had the opportunity to take a directed reading course from John Smithin. In addition to being a long-time member of the Progressive Economics Forum, John is […]
Read moreWith the Alternative Federal Budget (AFB) officially released, you’d think the budget gnomes at the CCPA would have some much deserved time off. Â Unfortunately with the snow still falling in Ottawa, we figured we’d put them back to work. Every year, the AFB puts together ideas from all of the partners involved. Â Once everything is said and done, those ideas […]
Read moreConversation fragment overheard the other day: “This deficit thing. It worries me. My grandchildren you know?” To which his interlocutor replies: “Yes, it worries me too. We just can’t keep this up.” And so it goes. The grandchildren are trotted out. We shudder in collective guilt, thinking about the financial hardship that our selfishness imposes on the progeny of our […]
Read moreHere’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 much more out of it […]
Read moreAt the end of May in Quebec City at the annual Canadian Economics Association conference, the PEF awarded the second John Kenneth Galbraith Prize in Economics to John Loxley. Below is the full text of John’s Galbraith Lecture (pdf version with proper footnotes and formatting here). Congrats again to John for a lifetime of amazing work! Also, thanks to one […]
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Read moreBelatedly, two days after the fact, the Globe picked up on Bank of Canada governor Carney’s discussion of the Bank’s model of the world economy (I blogged about that speech here) at a speech to the Ottawa Economics Association (OEA) last Wednesday. The Globe spun the story in an unusual way by suggesting that the Bank and its analysis (using […]
Read moreWhen the global recession hit in late 2008, economic output and employment fell so steeply in such a short period of time that policy-makers were seriously concerned about the possibility of the downturn growing into a global depression. The sense of urgency led to unprecedented levels of multilateral economic coordination, with stimulus spending rolled out worldwide and significant deficits incurred […]
Read moreYesterday, the Fraser Institute published a new report, which argues that the government stimulus did not drive Canadian economic growth in the last two quarters of 2009 and suggests that government spending on infrastructure was useless for the economy. The report earned the scorn of Finance Minister Flaherty, who was quoted in the Vancouver Sun calling the report “poorly done […]
Read moreIn an important series of columns in the Financial Times, economics editor Martin Wolf has been making the argument that – to avoid a relapse into recession – governments must run deficits so long as the private sector is running large surpluses of savings over spending. “Jumps in fiscal deficits are the mirror image of retrenchment by battered private sectors. […]
Read moreAs the communique from the Pittsburgh G20 put it, “it worked.” Unprecedented macro-economic stimulus in the form of ultra low interest rates and large government deficits pulled the global economy back from the abyss. Canada has now joined most countries in exiting the recession, at least very tentatively. But what is next? The official line from the Canadian government, the […]
Read moreI have enjoyed being one of the three economists appearing on the occasional “Bottom Line” panel which CBC TV has been running on its National News. My fellow panelists (Patricia Croft from RBC Securities and Mark Mullins of the Fraser Institute) are personable, informed, and for the most part non-dogmatic about things. (I know it will surprise many PEF readers […]
Read moreI was out of the country but have the impression that the extremely gloomy OECD forecast and critical recommendations for Canada released just before the G20 London summit were not given the attention they deserved. http://www.oecd.org/document/59/0,3343,en_2649_33733_42234619_1_1_1_1,00.html The OECD released its intermim outlook largely to push the case for more stimulus by G20 countries, particularly those, like Canada, with strong fiscal […]
Read moreThe Canadian media didn’t pay much attention to this economic crisis before the stock markets plunged last fall, and that has continued to be a major focus. But this focus on the stockmarket and the mistaken perception that this crisis is all the fault of the U.S., is leading to the overly optimistic forecasts of recovery. There’s been very little attention […]
Read moreI really enjoyed a recent piece by Tom Palley “After the Bust: The Outlook for Macroeconomics and Macroeconomic Policy.”  He argues with great assurance that only progressive Post Keynesian analytics can explain the crisis, and that we won’t get out of it with a bit of Keynesian tweaking of the neo liberal paradigm. http://www.levy.org/vdoc.aspx?docid=1116 “Change†was the buzzword of the […]
Read moreThere’s a great article in today’s Vancouver Sun hammering on the fact that all major mainstream economists failed to anticipate the economic crisis. Provocatively titled Economics 101: Everything you know is wrong, the article quotes James Galbraith’s indictment on the mainstream of the profession that originally appeared in a New York Times Magazine article: “There are thousands of economists. Most […]
Read moreIt strikes me that progressive economists should talk less about the need for immediate fiscal stimulus, and more about the case for an extended period of public investment led growth. Of course, as we slide into recession, Canadian governments will likely shift from surpluses to deficits simply by not cutting spending as much as revenues fall in line with shrinking […]
Read moreI was intrigued by what is happening in Iceland, so the following is a piece I’ve written on it. It has some introductory macro-economics in it, which I think it is good to keep in perspective as we consider the frantic attempts being made to prevent an economic depression. The economic and financial collapse of 2008 is shaping up to be […]
Read moreThe Bank of Canada today announced what appeared to be a dramatic cut (witness the splashy headlines) in the target for the overnight rate — a 50 basis point reduction. Bank of Canada to the rescue? Think again. The move was greeted with yawns from the banking community, which lowered mortgage rates by a mere 25 basis points. I’m surprised […]
Read moreIt’s not often that I get my hopes up about a potential volte-face in the way we talk and think about economics at the policy and political level but this is by far the best news I’ve heard in a long long time. It seems that our very own Jamie Galbraith, scion of John Kenneth Galbraith and keynote speaker for […]
Read moreDenial with a capital “D”. That’s the only way to describe the reaction to Friday’s stunner from Statistics Canada: real GDP shrank 0.3% (at annualized rates) in the first quarter, and hence Canada is likely already in the recession that our fearless government leaders have been saying can’t happen here. For months economists have been wondering if Canada could escape […]
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