Stiglitz: Arrested development

Starting with the collapse of the Doha Round, Joseph Stiglitz beats up on US agriculture subsidies that distort world trade and undermine the position of farmers in the South. From The Guardian: The failure hardly comes as a surprise: the United States and the European Union had long ago reneged on the promises they made in 2001 at Doha to […]

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BC’s poverty amidst plenty

My latest column for The Tyee: Without any fanfare a report popped up on the web site of Human Resources and Social Development Canada this past month. No press release, no communications strategy at all. Just another statistical report on poverty in a society that thinks of itself as middle class. But this is not just another statistical report on […]

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Shaking the Invisible Hand

Browsing at a used book store in Vancouver, I picked up some classics on the cheap. Someone must have dumped their economics books, thinking them passe. I’m keen to revisit those classics – the more I learn, the more I get out of them. So I got a 1964 edition of Keynes’s General Theory of Employment, Interest and Money, Robert […]

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Canadian R&D spending is weak

Today’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, […]

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The R Word

That 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 […]

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Latin America watch

Mark 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 […]

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The World Upside Down

by Jim Stanford I’ve now been in Melbourne Australia for one month of my 12-month sabbattical. It’s always interesting for an economist to live somewhere else and compare the micro-minutae of life. It’s a sure-fire way to drive your travelling partners nuts. Here are my main impressions of economic life on the bottom side of the planet so far: 1. […]

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Defending Sweden

The 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 […]

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Fear of Sharing

All of this equalization talk has Preston Manning worried. While Alberta Premier Ralph Klein would have just told the rest of us to keep our grubby hands off Alberta’s wealth, Manning and his co-author Fred Kerr take 1200 words to explain to us that Alberta is already sharing as much as it can. Let’s take a walk though their oped […]

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Adam Smith the anti-poverty activist

Princeton economist Alan Kreuger provides another take on the “Adam Smith did not wear the Adam Smith necktie” theme, from a 2001 New York Times column, that reviews “Economic Sentiments: Adam Smith, Condorcet and the Enlightenment” (Harvard University Press) by Emma Rothschild, director of the Center for History and Economics at King’s College, Cambridge: Emma Rothschild … argues that Smith […]

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Lots of kindling

Are we headed towards a recession in 2007? Housing markets have begun to turn, interest rates are back where they were pre-9/11 and oil is near $80 a barrel. Nouriel Roubini puts the risk of a US recession at 50% for 2007. I like this approach – no one can predict the future so we must think ahead in terms […]

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Debunking labour market “rigidities”

Neoclassical 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 […]

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The WTO is Not Free Trade

Since I just mentioned Dean Baker’s Beat the Press blog, here is a short but sweet commentary on the loaded term “free trade”. Dean has been making this point for years, perhaps too often for my tastes, but it is a good one and worth repeating in the context of the Doha collapse: The WTO is Not Free Trade It […]

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Herding cats: St. John’s edition

Looking towards the Council of the Federation meetings in St. John’s later this week, John Ibbitson thinks he’s found the magic elixer to solve the alleged “fiscal imbalance”: This week, the provinces probably will suggest a compromise. The first component of any federal transfer would consist of an equalization fix, based on a report commissioned by Ottawa and released in […]

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Bubble bubble toil and trouble?

The bad news is starting to come in from south of the border. For those interested in following bubblemania, I recommend The Vancouver Housing Market Blog. The LA Times reports: The chief economist of the California Assn. of Realtors has stopped using the term “soft landing” to describe the state’s real estate market, saying she no longer feels comfortable with […]

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WTO talks collapse

What a difference a few years make! Five years ago it was looking pretty ugly on the international trade front. The FTAA had a full head of steam, and was Bush’s top foreign policy priority …  at least until 9/11 happened. The post-9/11 climate led to a full court press by the US and EU on Southern countries to launch […]

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Luck, ability and income tax policy

A old NY Times column by economist Hal Varian, recussitated by Brad DeLong: … Those who argue for a more progressive income tax emphasize equity: a tax dollar paid by a rich person causes less pain than a tax dollar paid by a poor person. Those who argue for a less progressive system emphasize efficiency: the most productive people should […]

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The Economist takes on CGE modelling

When I was doing research on the idea of a Canada-US customs union, I came across a study (a PhD dissertation, actually) that was cited by proponents, claiming huge gains from a customs union. I looked into the methodology and found some serious shortcomings. CGE, or Computable General Equilibrium, models are a quasi-empirical approach that puts numbers to experiments, such […]

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Demographic apocolypse 2020?

Pierre Fortin, who I usually find to be an interesting economic commentator on public policy issues, makes the case for demographic apocolypse. i used to share that fear, but I’ve done some number crunching on this issue in the BC context (i.e. more seniors than the national average) and am not convinced that the problem is as large as Fortin […]

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Development Round? What Development Round?

Joseph Stiglitz demonstrates the hypocracy of the Doha Round, and US and EU trade policies: America’s new trade hypocracy As the current “development round” of trade talks moves into its final stages, it is becoming increasingly clear that the goal of promoting development will not be served, and that the multilateral trade system will be undermined. Nowhere is this clearer […]

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Housing the Homeless and Addicted

The New York Times reports on a Seattle initiative to provide homes for homeless alcoholics. They do not require sobriety to get a spot, a development that rankles moralistic conservatives. The reason is economics: it costs less to house them than what is currently spent on health care, detox and criminal justice. New York and some other major US cities […]

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Softwood: The Final Capitulation

“Guys, stop it! You’re gonna embarass me at George’s birthday party.” PM Harper clings to a crappy deal over the objections of companies representing half the exports to the US. Closer ties to Bush under conservative continentalism have not seemed to win us any favours. Oh, and by the way, Prime Minister Accountability, would you please release the text of […]

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Bubble seeks air

This makes me nervous: Mortgages getting risky: CIBC HEATHER SCOFFIELD Globe and Mail Update TORONTO — Household credit is stable, but that statement masks the growing popularity of untraditional and risky mortgages, a new study by CIBC World Markets says. Household credit is growing steadily at an 11-per-cent annual pace, pushed by a 10.9-per-cent rise in residential mortgages for year […]

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Rethinking income security

The Caledon Institute weighs in on income security for working age adults. The abstract is below but this does not give any of the details. The authors do a great job of describing why the current patchwork mix of EI and welfare does not work well. Towards a New Architecture for Canada’s Adult Benefits Ken Battle, Michael Mendelson and Sherri […]

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Brad DeLong on the state of economics

From 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 […]

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Softwood capitulation part 2

Columnist Paul Willcocks weighs in on the bad softwood lumber deal: VICTORIA – The softwood deal that David Emerson and Stephen Harper are pushing is so bad it’s hard to imagine what they’re thinking. The U.S. lumber industry wins; Canada loses. Canadian companies hand over $1 billion in to the U.S., with about half of it going directly to their […]

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WTO: not dead yet

Will this be the end of the Doha Round? I doubt it. Deadlines come and go but negotiations still manage to go on. The Uruguay Round that led to the creation of the WTO went for eight years. The Doha Round (originally framed as the Doha Development Agenda, but that has long been forgotten) seemed dead after the Cancun Ministerial […]

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Alberta’s resource royalties

Just on the heels of posting a $9 billion surplus for the last fiscal year, largely on the strength of resource royalties, comes this fascinating article in The Globe, which echoes comments about low royalty rates that the Edmonton-based Parkland Institute has been making for years: Alberta eyes greater share of oil wealth Considers changes to royalty system Alberta is […]

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Rethinking labour market “flexibility”

Jim Stanford looks at the OECD’s press for labour market “flexibility” in his Globe column: Traditional economics holds that a less regulated, more “flexible” labour market — freed from well-meaning but counterproductive government interference — will automatically find a better match between supply and demand, and hence reduce unemployment. This general view was roundly endorsed by the high priests of […]

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