Worthwhile Canadian Initiative

The recovery picks up speed

Today's GDP numbers are a happy contrast to the sort of numbers we were seeing six months ago:

Recent data from the US are also encouraging. The recession is over, and the end of the recovery is getting closer.

Number of Possible Debates Between Harper and Ignatieff

On Twitter, Andrew Potter asked the (presumably rhetorical) question:

Has anyone done the math on "anytime, anyplace"? How many potential debates is that? A brazillion? And Harper can't make one?

Although Andrew probably wasn't looking for a 'real' answer, I thought I'd try to give him one.  Now, if we use a loose definition of time and space, the answer is 'infinite'.  

I wondered, however, how many possible debates could there be if we placed reasonable limits of what constituted a time and a place.  Here is what I came up with.

Twittometer

The number of twitter followers for possible future Prime Ministers of Canada:

As of 12 March 2011: @M_Ignatieff 61,415; @pmharper 98,164; @jacklayton 57,824; @gillesduceppe 44,550; @elizabethmay 11,447.

As of 30 March 2011: @M_Ignatieff 74,988; @pmharper 113,192; @jacklayton 68,622; @gillesduceppe 49,637; @elizabethmay 15,390.

Elizabeth May has experienced the largest percentage increase in the number of followers, 34 percent, followed by Michael Ignatieff at 22 percent. However in terms of the absolute number of followers, May has experienced the smallest increase, just 3,943 more followers.

Stephen Harper has had the largest absolute increase in numbers, at 15,028, though his percentage increase, 15 percent, is below that of all the other leaders except Ignatieff. Michael Ignatieff saw his number of twitter followers increase by 13,573 in absolute terms.

(For a more extensive analysis, go to http://politwitter.ca/page/statistics which shows a dramatic increase in the amount of Conservative tweeting.)

What does this mean?

That 99.97 percent of Canadians would rather listen to Rebecca Black's Friday (slowcore Brian Eno sound-alike here) or watch epic meals on youtube than follow @pmharper on twitter.

Tax unfairness or income unfairness?

The Conservative Party of Canada has announced that, if elected, they would allow families to "share up to $50,000 of their household income for federal tax purposes." (This tax change would be implemented in about four years time.)

In tax lingo, this means income splitting. A family where one person has an income of $110,000 and the other person has no income could opt to be taxed as if one person  had an income of $60,000 and the other person had an income of $50,000.

Because Canada has a progressive income tax system, shifting income to the lower earning partner can result in considerable tax savings. I estimated the savings for a one-earner family with $110,000 in taxable income at $3,989 at 2010 tax rates, but that did not take into account any changes in provincial tax liabilities.

Don't eat the marshmallow

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery" - Mr. Micawber in Charles Dickens' "David Copperfield"

Canadians are increasingly indebted. 31% of us struggle to make our bills and payments. We're pretty clueless when it comes to retirement - just 40% have a good idea how money we need to save in order to maintain our standard of living in retirement. 

This state of affairs worried the Harper government enough to prompt the creation of a Task Force on Financial Literacy.  The numbers above are taken from their report.

I regard the the whole financial literacy exercise with some cynicism. As Canada has reasonably adequate government-funded income support programs for seniors, governments have a strong interest in ensuring that Canadians have enough savings that they do not need to rely upon those supports.

Ontario's Public Finances: A Fiscal Primer

With Ontario set to deliver its own budget on Tuesday March 29^th, it is useful to provide a perspective on the province's finances given that it is Canada’s most populous province and largest provincial economy. Ontario faces some tough fiscal decision making over the next few years given a set of deteriorating public finances and economic challenges that were exacerbated by the recession. 

Public Policy and Nichols' Law of Catcher Defense

A post where I disagree slightly with a WCI colleague. There is some hesitation here - not because I am afraid to publicly disagree with a colleague, rather it is because she's smarter than I am and therefore I am not entirely convinced I am correct.

GDP & Population Shares, Natural Resources & Prosperity: A National Comparison

Looking at only one province’s share of GDP and population over time is probably not enough given the immeasurable majesty of the Canadian federation.  It is time to expand the analysis to take all the other provinces into account to gain insight on the evolution of the Canadian economy. 

The preponed government spending multiplier may exceed one

From very casual observation, I get the sense that a lot of extra government spending in the last couple of years was to build stuff that would have been built anyway. They just built it a bit earlier. It was preponed government spending. Am I right?

Anyway, I'm going to assume I'm right, because it makes a really neat macroeconomic thought-experiment, as well as being possibly relevant to Canadian fiscal policy.

Dumb men commercials

 Dumb men commercials. Ads featuring men who can't cook. Men who are too stupid to understand how casinos work. And, especially, dumb white men, like the oldsters in the TD ad or the man with "tax pain" in the H&R Block commercial.

There's enough stupid men commercials to inspire a blog dedicated entirely to the subject.

Why are these ads so pervasive? 

Live, on tape delay: It's the 2011 federal budget

I'm off to the budget lockup, where I will be without internet access until the Minister of Finance starts to give his budget speech. I'll be writing for the Globe and Mail's budget page. Here is a short summary of what I'm looking at ex ante, and I'm scheduled to be a part of the live discussion sometime after 4:00.

I'll try to find time to keep track of the day's events, and will post my notes later this afternoon/evening. Updated: Well, that was uneventful.

What are the policy implications of an under-valued Canadian dollar?

I wrote a post a few months ago on the curiously nonlinear relationship between the Canadian exchange rate and oil prices. Since then, the prices of oil and other commodities have continued to increase, and it is perhaps time to consider the policy implications of the kink at parity.

What’s Your Best Guess for the Federal Deficit in the Upcoming Budget?

Well, Tuesday March 22^nd is Federal Budget Day.  If you are a movie buff, Oscar night is your big fiesta.  If you are a CFL fan, it’s the Grey Cup.  If you are an economist (with a public finance background) then Budget Day is when you clear your day, make some popcorn and gather family and friends around for some entertainment and analysis.  What is a budget without at least one pre-budget forecast? 

Is it wrong to keep working?

Older university professors earn more than younger ones - this paper has Canadian evidence and references.

Studies of scientists and of Norwegian academics have found that research productivity begins to fall at some point, but the onset and rate of decline varies across disciplines. One more recent study found that age and publication productivity were unrelated. Studies (here and here) that track professors' student evaluations over time have found that professors become neither better nor worse teachers as they age. My reading of the research: productivity might decline after middle age or it might stay constant, but it certainly does not increase.

Putting these two observations together, the relationship between pay and productivity over time looks roughly like this:

Estimating the Impact of the HST

In the last month we have seen two studies released on the impact of the HST - Consumer Impacts of BC’s Harmonized Sales Tax (PDF) by Jonathan R. Kesselman and The Impact of Sales Tax Reform on Ontario Consumers: A First Look at the Evidence (PDF) by Michael Smart.  Both papers examine the impact that HST had on the prices of a representative basket of goods in each province. Both papers use a rather clever method - Smart compares price changes in Ontario before and after the HST with price changes in Quebec over the same period where the HST was not enacted.  Kessleman does the same, except compares British Columbia to Alberta, Saskatchewan and Manitoba.  By doing so the papers can isolate price rises due to the HST relative to price rises caused by 'regular' inflation.  Both papers find shockingly similar results:

Do Keynesians understand their own models?

If we lived in a world of barter exchange, or in a world where people could use barter exchange at minimal cost, Keynesian macroeconomics would make no sense whatsoever.

That is not, of course, a criticism of Keynesian macroeconomics. We do live in a world where people use monetary exchange, not barter. And people (usually) use monetary exchange because barter is (usually) very costly.

But do Keynesians understand this?

Some Economic Underpinnings of the Arc of Protest

Along with the latest news from Bahrain, the public protests, rebellions and uprisings in North Africa and the Middle East that are underway in an arc stretching from Tunisia to Iran have certainly caught the attention of the world.  The popular analysis of what is driving these protests has invariably focused on a desire for democracy and a fatigue with autocratic rulers.  What is fascinating is the insight an examination of some basic economic and demographic indicators for the region can provide especially when compared to the West.

Are there any straight lines in economics? Roman and Anglo Saxon roads.

This post is meandering philosophical whimsy that goes nowhere. If you don't get off on that sort of thing, best stop reading now.

Adam Smith on disaster and virtue

There are no words for what the people of Japan are experiencing: earthquake, tsunami and now, possibly, nuclear disaster.

In  The Theory of Moral Sentiments, Adam Smith wrote a troubling passage describing "a man of humanity's" reaction to a far distant earthquake:

Worthwhile Canadian Initiative - The Shameless Self Promotion Edition

After doing a few dozen radio interviews, I just finished up my first ever TV interview.  If there's anything at all usable after they edit my ummms, ahhhs, and pauses, I'll be on Global with Sean O'Shea discussing the economic impact on Canada of the earthquake in Japan.  I believe it will be on at 6PM (again, if I gave them anything they can use).

Update: Video is available here. I'm on with Douglas Porter (BMO) and Tim Richardson (U of T). I'm not sure why I'm looking down and to the left, other than I was asked to.