It’s (Rarely) the Government’s Fault

As the U.K. slipped into a technical recession – two quarters of negative GDP growth – the media, industry, and opposition parties were quick to pounce on the U.K. government austerity measures. Either they blamed the U.K. government for the slowdown outright, or suggested that austerity during an economic slump are foolish. The data says… Read More

Across the Eurozone, Citizens Vote Out Austerity Governments

World stocks continue to oscillate with every bond sale and finance minister utterance in the 17 member Eurozone. Yet, the underlying reality is that the situation hasn’t changed at all. Matthew O’Brien has a nice summary in The Atlantic. It’s tragicomic. Southern Europe already has an unemployment crisis. Their depression-levels of joblessness are a dagger… Read More

The Canadian Mint Has Unveiled the Blueprint of a Bitcoin Successor

The Bitcoin currency – an online, anonymous currency, ‘mined’ by computing power – was fraught with problems from the start. Bitcoin’s supporters champion that it’s ‘safe from the instability of fractional reserve banking‘. Hardly. Bitcoin has proven to be a volatile currency, with only a tiny market for goods and services, no available deposit insurance,… Read More

The Great Manufacturing On-shoring

Tim Worstall at Forbes brings up an important point about the recent increases in wages and working conditions in China for major American tech companies. These manufacturers would allow wages and conditions to stagnate to maintain a competitive cost edge over other firms, but the inevitable Chinese labour shortages have increasingly given employees the upper… Read More

Comparative Earthquake Economics

A recent article by Matt Yglesias on the affect of weather on the economy (or at least, how it is measured) got me thinking about post-disaster economics. What happens to national economies after major natural disasters? Certainly, the loss of life can’t be ignored, but what about the survivors’ livelihoods? The immediate affects are obvious… Read More

The Mobile Phone’s Rise in Developing Countries

Saying that developing countries ‘leapfrogged’ tradition information communication technology adoption is a massive understatement. Ten years ago, cell phones and traditional landlines were virtually non-existent in low income countries. In 2002, there was less than one cell phone per 100 people in UN least-developed countries compared to 64 cell phones per 100 people in the… Read More

Economists Agree: Corporate Taxes Should Be As Low As Possible

While President of the United States, Harry Truman made a remarkably succinct observation on economists. He said, ‘Give me a one-handed economist! All my economists say ‘On the one hand on the other’. Economists tend to be a divided bunch  – Winston Churchill once said ‘If you put two economists in a room, you get two… Read More

Strategic Defaults Can Definitely Depress Local Housing Prices

I’ve been away on vacation, but a quote in an article from three weeks ago on CNN caught my eye. It has something that is very important to address when looking at strategic defaults. But don’t expect a few depressed mansions to bring down the neighborhood. A single foreclosure in an otherwise wealthy area is… Read More

Canada Staved Off 4th Quarter Contraction

With most economic indicators in for December, it appears that Canada’s economy experienced positive but modest growth in the 4th quarter. Canada’s soaring trade balance kept Canada’s economy from shrinking as the Canadian consumer began to ease spending. Overall, low interest rates supported continued new building in both the residential and private sectors. As for… Read More

Full Recourse: The Key Difference Between the Canadian and U.S. Housing Markets

The largest difference between Canada’s housing market and the U.S. is that Canadian mortgages are full recourse. In Canada, if you take out a mortgage and then default when it is ‘underwater’ – your home value is less than our mortgage – your other assets and future income are at risk. In the U.S., only… Read More