Well, there is a new policy think tank in Canada and they have just released a commentary on the minimum wage.
The existence of a productivity gap between Canada and the United States should ultimately manifest itself in terms of the growth rate of real per capita GDP. If productivity growth in Canada is consistently below that of the United States, then our real per capita GDP should also not grow as quickly as the United States. Yet, the historical evidence shows that the real per capita GDP growth rate in Canada has not necessarily underperformed the United States since 1870. However, there is an interesting differential performance across time periods.
I was a bit surprised that the recent upsurge in unemployment in Ontario in June, which was especially concentrated amongst youth (individuals aged 15 to 24 years), did not generate much discussion about the impact of the minimum wage. Ontario’s adult minimum wage rose 75 cents on June 1st to hit 11 dollars per hour. Ontario also lost 34,000 jobs in June and employment in the age 15 to 24 category dropped by 28,800.
Well, the latest Statistics Canada Labour Force Survey numbers paint a rather bleak picture for Ontario with employment dropping by 34,000 jobs and the unemployment rate rising from 7.3 to 7.5 percent. However, Ontario’s employment picture is much more complicated than that and regional numbers suggest that some parts of Ontario – well the GTA (The Greater Toronto Area) – is enjoying a boom comparable to a western resource producing province.
A "simple rule" is a formula that tells a central bank how to set the nominal interest rate as a fixed function of a small number of variables. The Taylor Rule, which sets the nominal rate as a function of the gap between actual and target inflation, and the gap between actual and potential output, is the classic example of a simple rule. Are simple rules better than discretion? Here's how we can do a test to find out, and the results of an old test where simple rules failed to do better than actual policy.
[This is a guest post by Hashmat Khan of Carleton University and Nyamekye Asare of the University of Ottawa.]
Can policies stimulating private investment deliver higher employment? Maybe, but investment and employment have become disconnected recently in Canada.
John Taylor has noted a strong negative correlation between investment and the unemployment rate, and argued that higher investment is the best way to reduce unemployment. Paul Krugman has questioned the direction of this causality, and the Canadian evidence seems to be somewhat supportive of his position.
Well Canada Day is once again upon us – we now have 147 years of Confederation to celebrate– and what better way to celebrate than with a brief retrospective of economic performance as measured by per capita GDP. For your viewing pleasure, I present real per capita GDP in $2002 for each of the main census years since 1867 as well as a calculation of the average annual growth rate of real per capita GDP for each decade.
"Should house prices be included in the CPI?" is not a good question to ask.
The best answer to that question is another question:
"Why do you want to know?" Or, "It depends; what are you planning to use the CPI for?"
Instead, it would be better to ask the question in a different way -- one that already answers that second question. Like:
"Should house prices be included in the price index that the Bank of Canada uses to define 'inflation' when it targets inflation?" (They aren't really included now, except very indirectly over the longer term -- long story (pdf).)
Well, the election is over and I must admit I was not that surprised the Liberals formed the government but I am surprised at the fact it is a majority government. There are now numerous economic challenges facing the province and suspect after the fun of campaigning from the left, the Liberals may eventually be forced to govern from the right. And then perhaps not. Still, what explains what is happening?
Well, tonight is the Ontario election debate and inevitably job creation will come up as a topic. On the one hand, Tim Hudak will have to deal with the fallout over his Million Jobs Plan. On the other hand, Kathleen Wynne and Andrea Horwath will need to demonstrate what their plans for employment growth in the province are. Whether they will venture an estimate of how many jobs their policies will create will be an interesting question. To help everyone prepare for tonight’s clash of Ontario Titans, here is (an estimate of) average annual employment growth in Ontario from 1977 to 2013 with premiers and political affiliations duly noted.
The debate over the Ontario PC “Million Jobs” platform has certainly gone ballistic over the last few days and having posted on the subject in January when the plan was first announced I certainly think its worth another post. When the “Million Jobs” plan was first mentioned in January, my response was to look at employment growth over the long term to see how plausible 125,000 jobs a year was as an outcome.
Ontario’s budget will be presented today in the wake of new GDP numbers from Statistics Canada showing that Ontario’s real GDP growth was amongst the poorer performers in the country in 2013 (Quebec, NS, & NB were lower). Manufacturing was again singled out as one of the sectors in which Ontario is doing rather badly with a decline in output in 2013 of 2.3% as “computer and electronic products, motor vehicle and motor vehicle parts, machinery, and iron and steel mills and ferro-alloy products all declined.” However, 2013 saw an increase in manufacturing output in Saskatchewan of 3.4 percent with the gains in the areas of chemical, food and wood products. Alberta also saw an increase in manufacturing output of 1.1 percent. It would appear that the news in manufacturing is not all bad even if one considers employment.
Canadian retailers have recently been concerned that the Canada Border Services Agency has been too lenient with cross-border shoppers in the wake of the increase in duty free limits in 2012. While it is true that cross-border trips have grown substantially over the last decade, I’m not sure they should be that concerned.
Well the price of gasoline just spiked upwards across Canada and the usual media analysis has begun. Five key reasons were summarized as follows by Shawn McCarthy in the Globe and Mail: 1) Approach of the summer driving season leading to a switch to summer gas formulations which leads to a reduction in supply. 2) Higher crude prices. 3) A lower Canadian dollar. 4) Lack of retail competition in Canada and 5) U.S. exports of gasoline and diesel out of North America creating tighter demand and supply conditions. I thought explanation number three was rather intriguing.
It turns out that having a more efficient health care system is not just about sustainability or bean counting – it also can save lives.
It's a relative thing. I think it can only be defined relative to some specified alternative, like inflation targeting. It doesn't mean anything otherwise.
There are n different things a central bank could target, where n is an extremely large number. (Strictly, n is infinite, since any combination of two members of n is also a member of n.) One of those n things is the exchange rate. I know what "fixed exchange rates" means: it means the central bank targets the exchange rate. That leaves n-1 other things the central bank could target. But each of those n-1 different things would have different implications for how the exchange rate would change over time in response to various shocks.
Yes, it is April 1st but this post is dead serious. A study was recently done for economics, chemistry and philosophy departments across ten Ontario universities in an effort to gain insight on teaching workloads and research productivity. The reason? Ontario universities are tight for money and the government is looking for productivity gains and they want information on differences in research output and teaching load across universities.
It would appear fiscal restraint has finally caught up with police services across the country. The recent release of Police Resources in Canada, 2013 by Statistics Canada documents a decline in police strength after nearly a decade of increases as well as a slowdown in per capita spending. The crime rate, however continues to fall.
In Ancient Rome, a key imperial duty was to maintain the flow of grain and gladiatorial entertainment to the masses of Rome. Woe to the Emperor if the flow of grain was interrupted and the entertainment fell in quality. The Empire’s mantra was that the grain must flow! For Alberta premiers, charged with the guardianship of an exceptional economy whose prosperity is rooted in the volatile revenues of the oil and gas sector, the mantra is the natural resource revenues must flow! It is no surprise that Alison Redford is leaving. There seems to be a relationship between the weakening of government resource revenues and premier exits.
The Ontario economy’s manufacturing sector was particularly hard hit by the 2009 recession. One measure of whether it is rebounding is to see if there is substantial new investment going into Ontario manufacturing in terms of capital expenditures on construction, machinery and equipment. It does not look very good.