Tuesday , February 28 2017
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Nick Rowe

Internal migration flows in Canada

Discussions about demographics are typically focused on trends in fertility/morbidity and immigration/emigration, and these are what matter at the national level. But at the local level, trends on internal migration are also important. Statistics Canada has been publishing data on inter-provincial migration for years, but there's only so much you can get out of them. Migration trends within large provinces such as Ontario and Quebec may be more important for local service providers than...

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Economists making spectacularly bad forecasts, 1961 edition.

Back in the 1960s, the Ontario government's Department of Economics dutifully cranked out annual population forecasts. What is remarkable about these forecasts is how far wrong they were. The economists completely failed to predict the demographic changes that were about to hit Ontario. Here are the 1961 projections side by side with the actual 1976 population numbers for Ontario, downloaded from Statistics Canada's CANSIM table 051-0001. (An image taken from the Ontario...

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A forgotten cost of the gold standard.

While waiting for the kettle to boil in the Economics department lounge, I searched for something - anything - to read. Then I spotted the 1961 Ontario Economic Survey on the departmental bookshelf. Opening the old volume at random, I hit gold: A problem peculiar to gold mining is that the price of gold has remained unchanged since 1933-34 when it was set at U.S. $35.00 per ounce. However, in the past 27 years, the costs of production have risen considerably, while no compensation...

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Supply Contraints and Ontario Housing Prices

A key feature of housing markets in Canada over the last decade is the sustained increase in prices particularly in larger urban centers such as Vancouver and Toronto. Data from Canada Mortgage and Housing (CMHC) on average MLS housing prices for Ontario as a whole shows that between 1990 and 2015 the increase was from $171,979 to $465,441 – a rise of 171 percent. In Toronto, the average MLS housing price was $254,890 in 1990 and $622,046 in 2015 and is expected to range from $$694,000 to...

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Apple Prices and Core Inflation

An economy produces two goods: apples and haircuts. The production function for apples shifts up or down every year at random, depending on the weather. The production function for haircuts never shifts. The weather causes relative prices to change. When there is good weather, and the apple harvest is large, the price of haircuts in terms of apples rises (the price of apples in terms of haircuts falls). When there is bad weather, and the apple harvest is small, the price of haircuts in terms...

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Path-dependence of measuring real GDP?

I normally try to avoid index number theory. Don't trust me on this. It is well understood that real GDP is a very imperfect measure of welfare. We teach that in first year macro. That is not what this post is about. What I'm worried about is whether real GDP is an imperfect measure of itself. Does it have internal validity? If better technology enabled producers of new goods to ramp up production more quickly to meet initial demand, would that cause the measured growth rate to fall?...

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Variety and Growth

A closed economy produces only apples, using fixed amounts of labour and land. Suppose there is an exogenous increase in the number of varieties of apples produced. With a constant returns to scale technology, GDP stays the same. But if people have a taste for variety, or a variety of different tastes, people are better off. It's not that the new apples are better than the old apples; but some like them better and some like them worse, and some like some of each. The new apples sell at...

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The Mary Tyler Moore Effect

In 1970, every Justice on the Supreme Court of Canada was male. Prime Minister Pierre Elliott Trudeau had an all-male cabinet. Canada had never had a female premier - or even a female television newsreader. Little girls across the country were starting to feel the faint stirrings of ambition, often encouraged by mothers who wanted their daughters to live life to the fullest. But they had no idea - how does one be a "career woman"? What does a professional woman even look...

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How to write an email that will get you what you want

Most of my day-to-day social and professional interactions take place over email. It's my primary form of direct, one-on-one contact with students, colleagues, and co-authors. Consequently, my impressions of people are shaped by their emails. Are their emails polite or demanding? Clear or confusing? For good or ill, I judge people by the emails they send. Based on my own personal experience, I am not alone. Others have judged me by the emails I have sent. I...

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Hume’s Sailing Ships correcting Samuelson’s Icebergs

Paul Samuelson said (PITA gated) that David Hume's price-specie flow mechanism (ungated) was wrong. And I am saying, nervously biting my fingernails, that Samuelson was wrong. Assume that durable sailing ships are costly to build, but have low (or zero for simplicity) operating costs. Assume apples are the only tradeable good, and one ship can transport one apple per year across the English Channel between Britain and France (the only countries in the world). Let P be the price of apples...

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