Assorted content to end your week. – Yes, it’s alarming that the Cons are eliminating environmental assessments on a huge number of projects. But even more worrisome is the complete lack of a connection between the basis for the exclusion and the possible environmental impacts: Ottawa is also walking away
Continue readingTag: monetary policy
The Progressive Economics Forum: Broadening the Bank of Canada’s Mandate
Yesterday, Mike Moffatt took to The Globe and Mail’s “Economy Lab” in response to my suggestion that the Bank of Canada should moderate the exchange rate. (Perhaps his motive for encouraging me to seek the Saskatchewan NDP leadership was to get me as far as possible from the levers of
Continue readingThe Progressive Economics Forum: 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
Continue readingThe Progressive Economics Forum: 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,
Continue readingThe Progressive Economics Forum: Marc Lavoie and Monetary Economics
There is a very interesting interview with PEF’s own Marc Lavoie here on the Naked Capitalism site on his new book. Monetary Economics was co-authored by Marc with the late Wynne Godley. (Make sure to start by linking back to Part 1.)
Continue readingThe Progressive Economics Forum: Complete details of 2008-09 Bank Support
Readers of this blog will have hopefully read my report “The big banks big secret” which examines the $114 billion that Canada’s banks received during the 2008-09 financial crisis. Its major finding was that at some point three of Canada’s five big banks had received support worth more than their market capitalization,
Continue readingThe Progressive Economics Forum: GDP: Austerity Bites
Canada’s economy grew by half a percent in the first quarter of 2012, staying on pace for unimpressive annual growth of two percent. The good news is that business investment was strong, at least on a seasonally-adjusted basis. (As usually happens in the first quarter, the actual dollar value of
Continue readingThe Progressive Economics Forum: 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
Continue readingThe Progressive Economics Forum: 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
Continue readingThe Progressive Economics Forum: The Oil Price-Loonie Transmission Mechanism
The most interesting comments from Bank of Canada Governor Mark Carney last week, in releasing the Bank’s semi-annual Monetary Policy Report, dealt with the relationship between the price of oil and the Canadian currency. The Globe and Mail reported Carney as publicly questioning why currency traders automatically presume such a
Continue readingThe Progressive Economics Forum: 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
Continue readingThe Progressive Economics Forum: 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
Continue readingThe Progressive Economics Forum: The Economist Takes Note: Modern Monetary Theory Gets Much Deserved Attention
As faithful readers of this blog will know, I make only very sporadic contributions to this blog but a substantial fraction of those contributions have made reference to modern monetary theory (MMT), the view (crudely put) that, based on a detailed understanding of the institutional mechanisms behind monetary operations, calls
Continue readingThe Progressive Economics Forum: 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%
Continue readingThe Progressive Economics Forum: 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 policy
Continue readingThe Progressive Economics Forum: Bring Out the Printing Press!
That’s the only way out of the deepening crisis of the advanced economies, according to FT economics editor Martin Wolf in his column today. “It is the policy that dare not speak its name: the printing press. The time has come to employ this nuclear option on a grand scale. The alternative is likely to […]
Continue readingThe Progressive Economics Forum: Hurricane Trichet Hits Jackson Hole
I just finished watching Jack Layton’s state funeral and notice that Jean-Claude Trichet’s speech from Jackson Hole is out. The European Central Bank president does not seem to get it. Far from acknowledging that last month’s interest-rate hike was premature, he touts “price stability.” His main theme is that the economic divergence between Eurozone countries […]
Continue readingThe Progressive Economics Forum: 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 […]
Continue readingThe Progressive Economics Forum: MMT: What it Means for Canada
Arun Dubois’ blog post yesterday on Modern Monetary Theory has prompted me to write my own take on the subject. For those interested, an interesting thumbnail sketch of MMT, essentially functional finance augmented by a full understanding of monetary operations, is explained at http://johnsville.blogspot.com/2011/06/modern-monetary-theory-mmt-in-nutshell.html. While MMT deals with the details of monetary and fiscal matters, […]
Continue readingThe Progressive Economics Forum: No Retreat, No Surrender: Time For Progressives to Explode Deficit/Monetary Myths
Friends, I’m concerned. I fear that too often, we on the left retreat when we should attack, surrender when we should vanquish. What do I speak of? Well, I am concerned that too many of us are willing to play in the frame, the box, the straighjacket of modern discourse about fiscal and monetary policy. […]
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