In this paper, we argue that much of the debate regarding the role of government policy in mitigating economic instability has failed to give sufficient attention to the role of capital markets. We argue that in an economy with well-functioning markets for risk-bearing, direct public...

One of the puzzling features of the recent behavior of the Canadian unemployment rate is its persistence in the presence of a sustained expansion in real national income. Neither deficient aggregate demand nor a once-for-all, supply-side-induced increase in the natural rate provides a convincing...

The art of macroeconomic model-building involves making strategic choices among a wide range of alternatives. Theoretical models range from the equation of exchange of the simple quantity theory to vast dynamic models involving many sectors and many agents and which defy analytical solutions....

This paper examines three possible sources of "de-industrialization" in an open economy: monetary disinflation, an increase in the international price of oil, and a 'domestic oil discovery. The analysis is conducted using a model which incorporates different speeds of adjustment in goods and...

While the monetary base might be a useful concept for analyzing variation in the money supply, it is a misleading indicator of the central bank's monetary policy. Three intervening institutional considerations are: (1) regulation of interest rates and the central bank's trading in LGS assets...