Every 5 years the federal Finance Minister updates the “marching orders” that guide the Bank of Canada and its conduct of monetary policy. This process is the one opportunity for democratic oversight of the Bank, which otherwise is deemed to be operating “independently” of government — all the better to ensure that it has the […] . . . → Read More: The Progressive Economics Forum: Challenging Inflation Targeting
Assorted content for your weekend reading.- Martin Lukacs highlights the Canadian public’s broad support for the Leap Manifesto – and the opportunity available to any party willing to put its contents into practice. And Shawn Katz is hopeful that the N… . . . → Read More: Accidental Deliberations: Saturday Morning Links
Over at the blog of the Institute for New Economic Thinking, Ottawa U professor Mario Seccareccia has given an interview titled “Greece Shows the Limits of Austerity in the Eurozone. What Now?”
The interview can be read here.
A piece in the Financial Times from several days ago has finally pushed me to scribble down a few initial thoughts on value – a topic I been thinking about more and more. Titled “The attack of the rentier killers”, the article argues that the wealthy who hold and receive income from assets will fight . . . → Read More: Political Eh-conomy: There is no good value
The past 18 months have seen real wages increase in Canada. (Yes, I double-checked.) Indeed, real wages have gone through two distinct phases of growth since the financial crisis hit the global economy in 2007. This may be surprising as we have been accustomed to hearing about the stagnation of real wages and the “decoupling” . . . → Read More: The Progressive Economics Forum: Problematic sources of recent real wage growth
The Bank of Canada has been in the news lately – or, more precisely, the news has been full of other well-placed people telling our central bankers what to do. In an interview on CTV this past weekend, Jim Flaherty made comments (later retracted) that Canada’s central bank will be pressured to raise interest rates . . . → Read More: Political Eh-conomy: Myths of central banking
In a recent post titled, “What happened to the distribution of real earnings during the recession?”, Stephen Gordon presents a graphs that shows some significant growth in real (adjust for inflation) earnings in Canada between 2007 and 2012. In addition, plotting average annual growth rates in real earnings against the distribution of earnings, the graph . . . → Read More: Political Eh-conomy: Legislating a real raise: Minimum wages and real earnings growth
The following article was written on October 25. I wanted to read it over once more before publishing it, then got busy with other things and forgot about it. In the roughly six weeks that have passed since the writing of this article, the Bitcoin prices have gone from roughly $200 to over $700. There . . . → Read More: Writings of J. Todd Ring: The rise of Bitcoin: and the challenge to the global domination of big money
Today, Statistics Canada reported inflation of 1.1% for August, even lower than June and July. But even at this anemic level, inflation is eating up three-quarters of wage gains. The Labour Force Survey indicates that Canada’s average hourly wage rose by only 1.5% between August 2012 and August 2013.
Subdued inflation and the weak job . . . → Read More: The Progressive Economics Forum: Inflation Slump Validates Low Interest Rates
Today, Statistics Canada reported an annual inflation rate of 1.3% for July. By comparison, it reports that the average hourly wage rose by 1.8% between July 2012 and July 2013.
In other words, even anemic inflation is eating up nearly three-quarters of wage increases. On average, Canadian workers have eked out only a 0.5% improvement . . . → Read More: The Progressive Economics Forum: Inflation Eats Up Three-Quarters of Wage Gains
Today, Statistics Canada reported an inflation rate of 1.2% for June, validating the Bank of Canada’s recent decision to keep interest rates low for the foreseeable future. The rationale to raise interest rates would be to curb inflation, which is already under control and well below the central bank’s 2% target.
But even at 1.2%, . . . → Read More: The Progressive Economics Forum: Inflation Eats Up More Than Half of Wage Gains
Statistics Canada reported today that inflation collapsed to just 0.4% in April. The Bank of Canada’s core inflation rate, which excludes volatile items, fell to 1.1%.
Continued low inflation does not provide a rationale to raise interest rates. Perhaps for that reason, Canadian monetary hawks have shifted their rationale for higher interest rates.
In 2011, . . . → Read More: The Progressive Economics Forum: Inflation Collapse Confounds Monetary Hawks
1. He’s Number Two: Stephen Poloz was widely acknowledged in economic and political circles as the second-best choice for the top job at the Bank of Canada. So the surprise was not that he was chosen. The surprise was, Why Not Tiff Macklem? Will someone please find out and tell the rest of us?
. . . → Read More: The Progressive Economics Forum: Polozogistics: Nine Thoughts About the Choice of the New Bank of Canada Governor
Here is my take from today’s Economy Lab in the Globe.
To expand a bit on alternatives, my take is that the neo liberal turn at the end of the 1970s was one possible response to the stagflation crisis, which found mainstream Keynesian economics wanting.
Left Keynesians such as Kalecki had long recognized that full . . . → Read More: The Progressive Economics Forum: Margaret Thatcher’s Economic Legacy
I was talking to one of my friends around the the university the other day and I brought up Raj Sherman’s interview in the Calgary Herald on some form of cooperation between the two Liberal parties in Alberta. It was an off-hand comment and I didn’t really expect a conversation to come of it. He . . . → Read More: calgaryliberal.com: Alberta Liberal and Federal Liberal Cooperation? Lets Go.
Economists say no, but as I drink my McD’s coffee this morning at the community centre, I must say I’ve been noticing a lot of “rounding up”, and not too much in the way of “rounding down”.
120% of the wealth created since the economic crisis began in 2007 has gone to the top 1% – meaning, the bottom 99% have fallen and have lost real income to the richest 1%. (Turn off “the news” and watch the Keiser Report for the real facts, or see Gerald Celente or Michael Hudson.) 20% . . . → Read More: Writings of J. Todd Ring: Rising prices, falling wages, and the emerging economic trends: Currency wars, hyper-inflation, currency devaluation, and how to prepare for the coming storm
Mark Carney’s tenure as Governor of the Bank of Canada overlaps some challenging economy history. Appointed in early 2008 just as the US housing bubble was popping, Carney took the helm in time for a financial crisis that brought the global economy to its knees. We are still living that history in terms of a […] . . . → Read More: The Progressive Economics Forum: Mark Carney’s tenure and the state of monetary policy
Statistics Canada reported today that, for a third consecutive month, consumer prices declined and the inflation rate fell below 2%. In July, the inflation rate was 1.3% and the Bank of Canada’s core rate was 1.7%.
Gasoline and natural gas prices, which have been lower this summer than last, dragged down the overall Consumer Price . . . → Read More: The Progressive Economics Forum: Prices Decline Yet Again
Today’s Consumer Price Index provides further evidence of Saskatchewan’s rising cost of living. Among the provinces, Saskatchewan is tied for the second-highest annual inflation rate: 2.0%.
Consumer prices decreased in June from May in nine provinces (all except Alberta). But Saskatchewan was tied for the smallest monthly price decline: -0.3%.
Compared to the rest of . . . → Read More: The Progressive Economics Forum: Saskatchewan’s Rising Cost of Living
Today’s report that the national inflation rate fell to 1.2% in May deflates calls for higher interest rates to reduce inflation. The central bank’s core rate was 1.8%, also below the 2% target.
The other argument for an interest-rate hike was to moderate mortgage lending and the housing market. However, the federal government’s move to . . . → Read More: The Progressive Economics Forum: CPI Deflates Case for Rate Hike
Today, Statistics Canada reported an annual inflation rate of 2%, precisely in line with the Bank of Canada’s target. With inflation under control and renewed risks to the global economy, there is little rationale for the central bank to raise interest rates anytime soon.
In fact, the Bank of Canada should now be more concerned . . . → Read More: The Progressive Economics Forum: Inflation On Target; Exchange Rate Off Target