Reading the Crisis
I highly recommend “The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis” by Graham Turner. “Graham Turner is one of only a handful of economists to understand the roots...
View ArticleDeflation Marches On
In November, prices fell for a second consecutive month and annual inflation fell for a third consecutive month. The Consumer Price Index declined from 3.5% in August to 3.4% in September, 2.6% in...
View ArticleBank of Canada Wimps Out
The Bank of Canada did not cut its target interest rate enough this morning, leaving it a full percentage point above the US central bank rate. As I argued last week, the Bank of Canada should have...
View ArticleDash to Deflation
Today’s Consumer Price Index suggests that Canada is lunging toward deflation. The annual inflation rate plummeted to just 1.2% in December, 2.2% lower than only three months ago. If this pace...
View ArticleWage-Price Deflationary Spiral
I don’t usually read (or cite) Sherry Cooper, chief economist for BMO Capital Markets, but in a recent article she was on the money: Layoffs and reductions in hours worked have been accelerating in...
View ArticleDangers of Wage Deflation
I’ve just read an excellent paper “From Financial Crisis to Depression and Deflation” by Hansjorg Herr of the Berlin School of Economics, circulated by the Global Union Research Network (but not yet...
View ArticleDeflation Watch 2009
Consumer prices fell by 0.1% between December 2008 and January 2009, reducing the annual inflation rate to 1.1%. Prince Edward Island joined the other two maritime provinces in having the dubious...
View ArticleIt’s the Demand-Side Stupid — Why Credit Ain’t Like Water
In the last few months, governments here and abroad have made every effort to “turn on the taps” of credit — in Canada, we have more than half a dozen such programs (and counting) under the banner of...
View ArticleA Hopeful Sign, But Not Cause for Complacency
The increase in consumer prices between January and February suggests that the threat of deflation may be less imminent than it appeared during the previous five months of falling prices. Whereas three...
View ArticleLower Inflation Frees Central Bank’s Hand
The Consumer Price Index decline in March confirms that deflation remains a greater risk than rising inflation. The annual inflation rate fell to 1.2% nationally and turned negative in one province,...
View ArticleStill Worrying About Deflation, Not Inflation
A lot of people I meet these days ask about the risk of a future surge in inflation, or even a return to “hyperinflation,” as a result of government’s efforts around the world to stimulate spending and...
View ArticleDeflation Strikes Back?
Today’s Consumer Price Index provides an important reminder that, despite expansive monetary policy from central banks and perceived “green shoots” in the economy, deflation remains a more serious risk...
View ArticleFlirting with Deflation
This morning’s Consumer Price Index data reveals that the national inflation rate fell to 0.1% in May. Four provinces – Alberta, New Brunswick, Nova Scotia, and Prince Edward Island – posted negative...
View ArticleDeflation Has Landed
Deflation is no longer a spectre, but a reality for Canada. This morning, Statistics Canada reported an inflation rate of minus 0.3%. Inflation turning negative was widely predicted, including in my...
View ArticleDeflation Deepens
In July, the Consumer Price Index posted an annual decline of 0.9%, the most negative inflation rate since July of 1953. This decline is troubling not only because it is larger than last month’s...
View ArticleDeflation Continues
This morning’s consumer price figures for August are reminiscent of July. The annual Consumer Price Index decline was 0.8% (compared to 0.9% last month.) With the exception of July, August was the...
View ArticleMore Deflation
While some prices rose slightly and others fell slightly between July, August and September, the total Consumer Price Index has remained exactly the same through these months. The annual inflation rate...
View ArticleMaxime Bernier Jumps the Shark
Through a series of speeches and Financial Post op-eds, former cabinet minister Maxime Bernier has been setting out an uncompromising right-wing agenda. He had Andrew Coyne applauding his proposal to...
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Danger: Wage Deflation Ahead
The labour market is in much worse shape than the official 7.3% unemployment rate implies. The latest evidence for this proposition is today’s miserable report on employment and earnings from...
View ArticleSeccareccia on Greece, Austerity and the Eurozone
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...
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