tag:blogger.com,1999:blog-5908830827135060852.post4214493509541773357..comments2024-03-01T02:40:14.946-05:00Comments on Bond Economics: Financial Crises As The Source Of Modern RecessionsBrian Romanchukhttp://www.blogger.com/profile/02699198289421951151noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5908830827135060852.post-11854646806157937712018-11-08T07:55:39.389-05:002018-11-08T07:55:39.389-05:00Hello, I just realised that I didn’t respond to th...Hello, I just realised that I didn’t respond to this. I saw the comment when I was not in a position to post a reply.<br /><br />I will probably look at the Canadian data. I was sort-of predicting a crisis that didn’t happen (luckily, I am not in the forecasting business.) Canada managed to avoid national shocks that hit employment, and so the housing market has managed to skate through things. (There was a regional downrturn in Alberta.) The CMHC has soaked up all the credit risk, so Canada was never going to get an exact replay of the US 2008 scenario.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-43975538629190428682018-11-06T08:21:09.546-05:002018-11-06T08:21:09.546-05:00Looking forward to it, especially given my previou...Looking forward to it, especially given my previous comment from the inventory post (below). Will you be doing a specific post on predicting financial crises in Canada? Perhaps I can help.<br /><br />“But the crises of the past 30 years are not quite the same as those in the past. According to Kevin Harris, director for North America at 4Cast-RGE, in New York, what we mostly had in those days “were inventory and durables cycles. Managers wrongly anticipated demand, then needed to undo the mistake by reducing production, laying off employees, thereby reducing consumption and economy activity. We tend not to have those anymore.<br />Today, finance dominates production and Harris says that instead of inventory cycle mistakes, we make asset valuation mistakes. Shocks to the real economy transfer with more impact.”ekhttps://www.blogger.com/profile/03650830509392929624noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-30209777957969935212018-10-27T09:31:56.761-04:002018-10-27T09:31:56.761-04:00Thanks for the references. Yes,the Canadian slowdo...Thanks for the references. Yes,the Canadian slowdown was idiosyncratic and policy-driven. I am not too familiar with it at this point; I would need to dig into it before writing.<br /><br />There was a recession in 2001, it just was not too deep. The effects depended on the sector. If you worked in technology, it felt like a depression.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-34679796484933093192018-10-26T10:07:34.689-04:002018-10-26T10:07:34.689-04:00Nice approach. I know this is something of a simp...Nice approach. I know this is something of a simplification, but allow me to nitpick. You may wish to consider Pierre Fortin's view about the "Great Canadian Slump" of the early 1990s being caused by idiosyncratically high real interest rates in Canada adopted by John Crow before even the US recession began. [Pierre Fortin, 1996. "The Great Canadian Slump," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 761-787, November.] It seems to me your explanation may also underplay the success of Bush administration in staving off a recession in 2001 through large countercyclical spending, an approach which was much lauded by your fellow Montrealer and traditional Keynesian, Harold Chorney. [Harold Chorney, "Revisiting Deficit Hysteria," Labour/Le Travail," 54 (Fall 2004)]Marian Rucciushttps://www.blogger.com/profile/12104215453386195003noreply@blogger.com