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Worthwhile Canadian Initiative

The Worthwhile Canadian Initiative blog is a self proclaimed “mainly Canadian economics blog”. Written by a group of intelligent economists, this blog is filled with top quality posts ranging from health, finance and inequality.

More Thoughts on a Better Income Support System for the Next Crisis

This post was written by Mike Veall of the Department of Economics at McMaster University. I appreciated the comments on my earlier post, where I suggested that a small monthly Basic Income system would have the advantage of being able to be scaled-up in a crisis. Incenting participation in the tax/transfer system is responsive to the work of Anna Cameron, Lindsay Tedds, Jennifer Robson and Saul Schwartz pointed out by Frances even though those authors seek a different,...

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A Small Basic Income as a Solution to the Magic List Problem

This post was written by Mike Veall of the Department of Economics at McMaster University. What if in a future crisis there is again a need to distribute money? As Jennifer Robson put it, “government doesn’t have a magic list with everybody’s name and addresses and bank accounts.” I was reminded of this when thinking about transmitting money to someone in a less developed economy. How can I be sure it will work? I could send a small amount, confirm receipt, and then send more. The same...

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A Simple Micro/Macro Corona Tax Model

I want something you could teach to first or second year economics students. Using tools they already have in their toolkit. MICRO Start with a Demand and Supply model of the market for haircuts. If we put a $1 per haircut tax on buyers of haircuts, the demand curve shifts vertically down by $1, reducing Q* and P*. If we put a $1 per haircut tax on sellers of haircuts, the supply curve shifts vertically up by $1, reducing Q* and increasing P*. If we put a tax on both buyers and on sellers...

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Can you be confident about an economy you can’t see?

Canada's economy may be on life support, but it is still hanging on. Even on streets that seem empty and shuttered, there are a few businesses getting by, or even thriving. The bookstore on Beechwood Avenue looks closed, but every so often a customer pops by to pick up an order from the bookrack hidden in the vestibule. At Life of Pie, the neighbourhood bakery/restaurant, the tables are stacked up, and the lights dimmed - but in the back the kitchen is humming, as the staff works hard to...

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Public Health Spending and Pandemic Preparedness

As the first wave of the COVID-19 pandemic in Canada begins to peak, there have several discussions and perspectives offered on how prepared Canada was for this pandemic as well as whether we moved quickly enough to address the situation. Obviously, the situation has improved markedly given that there is now time for these retrospectives and a not insignificant amount of finger pointing. In part, this is shaping the approach to moving forward by at least Alberta’s Premier who is...

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The behavioural economics of the Marie Kondo method

Marie Kondo is the guru behind the best-selling Life-Changing Magic of Tidying Up and Spark Joy. For some people, like me, her method works. One possible reason for its success is that, underneath it all, there are some sound behavioural economics principles. 1. Shift the reference point Marie Kondo recommends dividing one's possessions into five categories and tidying them a category at a time: first clothes, then books, papers, miscellaneous and finally sentimental items. Within each...

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Reading Amartya Sen on Poverty and Famines

The shut down of entire sectors of the economy in response a pandemic is akin to a crop failure. Both represent a sudden, large and unexpected decline in production. Both leave people without resources, without the wherewithall to command the necessities of life. So I am revisiting Amartya Sen's 1981 monograph Poverty and Famines (ungated), to see if his entitlement approach has relevance for today's crisis. Sen begins with the crucial distinction between there being enough and people...

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This is no virus for old men

Statistics Canada has just released a dataset with detailed anonymized information on all confirmed COVID-19 cases in Canada, available for download here. Unlike many of the available trackers, the Statistics Canada data reports cases by date of onset, defined as "earliest date available from the following series: Symptom Onset Date, Specimen Collection Date, Laboratory Testing Date, Date reported to the province/territory or Date reported to Public Health Agency of Canada." Defined that...

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Relative supply shocks, Unobtainium, Walras’ Law, and the Coronavirus

Here's the basic idea: A temporary 100% output cut in 50% of the sectors (what the Coronavirus does) is very different from a 50% output cut in 100% of the sectors (what our intuitions might expect from supply shocks in aggregate macro models). The former can easily lead to excess supply in the unaffected sectors; the latter leads to excess demand in all sectors. Here's the intuition: (As they say: "Shit just got real". And one of my daft old thought-experiments just got very real.) As...

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Regional disparities in hospital bed access across Canada

The number of acute care hospital beds per capita is an imperfect measure of a health care system's ability to respond to the COVID-19 pandemic. After all, beds are easy to acquire, as are hotels or similar buildings to put beds in. It is ventilators, IV drips, heart monitors, masks, gloves, and, above all, skilled health professionals that are the crucial resource constraints in this crisis. However if most hospitals operate with more or less the same ratio of nurses/beds, IV drips/beds,...

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