Monday , July 6 2020
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Miles Corak: Economics for public policy

The COVID19 pandemic is a threat to social mobility, as children in disadvantaged families will face more challenges in adulthood

The COVID19 pandemic will threaten social mobility. I examine four ways in which this is likely to happen in my presentation to the ZEW Seminar on COVID19 and inequality held on June 19th, 2020. This post summarizes the major messages. Drawing on past research I see four aspects of inequality in the lower part of the income distribution that will be exacerbated and threaten the upward mobility of children raised in challenging circumstances. But I begin by stressing that the United...

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The Canada Emergency Response Benefit, what now? Government policy as the economy re-opens should be rules-based

We have learned from past experience that public policy proceeds through two phases during major crises: first, as one influential economist has said, “whatever it takes”; then, “Oh my God, what have we done!” The Canada Emergency Response Benefit represents the best of whatever-it-takes policy. The speed, the depth, and the sheer uncertainty of the duration and aftermath of the COVID19 crisis called for maximum flexibility in the making of public policy, and full discretion for...

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Business cycles and the unemployment rate

The COVID19 crisis has unleashed an economic crisis that is unprecedented in its speed and in its depth, making these very interesting times to study macro-economics. Lecture 9 of Economics for Everyone describes the anatomy of the business cycle, and relates these swings in macroeconomic activity to a statistic that, as much as any other, speaks directly to the lives of citizens, the unemployment rate. So in this lecture we describe the anatomy of the business cycle, how...

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The meaning, the measurement, and the use of GDP

In this eighth lecture of Economics for Everyone, we begin our discussion of macroeconomics, the study of the overall level of economic activity. The lecture offers some background and motivation by examining the sharp increase and sluggish fall of the unemployment rate during the 1930s, the Great Depression. This led to a crisis in economic thinking, and to the publication of John Maynard Keynes’s “General Theory”. Thus macro-economics was born. Our first challenge involves...

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COVID-19 is not the great leveller, it’s the great revealer

Source: https://twitter.com/stphnmaher/status/1249767849352101890?s=20 In a medical sense, COVID-19, as highly contagious as it is, can be thought of as the great leveller. No one has immunity, and we face the health risk of this virus with a sense of our common humanity. But in a socio-economic sense, it is not as contagious. The jobs some of us hold give us an economic immunity, and we face the economic risk of this virus with a very different sense of our interconnectedness. Last...

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Canada’s unemployment rate will likely double to 10%, and that’s an understatement

Normally, I don’t venture into to predicting month-to-month changes in the unemployment rate, but this month is an exception for two reasons. The changes are certainly going to go well beyond the statistical noise inherent in the Statistics Canada survey, so there is no chance that the picture will be clouded. And history really isn’t a guide to what is coming next (in the very short term), so sophisticated models based on past data don’t have a particular advantage. My bets are on...

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What you need to know about Statistics Canada’s survey of the labour market

On Thursday, April 9th Statistics Canada will release the results of the Labour Force Survey for the month of March 2020. COVID19 makes this one of the most scrutinized releases in the 75 year history of the survey, reporting as it will on jobs and unemployment during the week of March 15th to March 21st. Here’s what you need to know, and what to look for. 1. As luck has it, the survey is well timed to capture the start of the economic meltdown The survey is anchored on a...

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Intergenerational mobility over time and space

This is Lecture 7 of the course ECON 85600, “Inequality, Economic Opportunity, and Public Policy,” that my class and I are now conducting online. You are welcome to participate, and can review all the course materials at https://milescorak.com/equality-of-opportunity/teaching/ . Warning: this is likely to interest social scientists in sociology, economics, or other fields, interested in developing a specialized knowledge of the subject! This lecture summarizes research on how we...

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Public policy in competitive markets, for the bad and for the good

In this seventh lecture of Economics for Everyone, we address the nature of government intervention in perfectly competitive markets. Perfectly competitive markets lead to efficient outcomes, in the sense that no one can be made better off without making someone worse off. But that doesn’t mean we like the outcomes, that they are fair or justice, and as a result governments are often pressured, or even captured, to intervene, sometimes not for the broader social good, but for...

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Big government, just in time

Big government road into town just in time, but alas when he jumped off his bronco and reached for his six-gun it became clear he wasn’t just-in-time government. What is clear, if nothing else, from the COVID-19 crisis, we should always choose our leaders with one thing in mind: character. Character determines how they will stand up to the unexpected. That’s what really matters. And frankly, all of them—municipal, provincial, federal—are passing the character test. Whether it is...

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