Note: this was prepared for my ECON 3403 students, and is a list of all of the mistakes I commonly see in student charts. Please add your suggestions for things to add to this list in the comments - or steal, modify, and use for your own purposes!  Good Chart Check List: Is my chart self-explanatory? Does it specify Who: The population the chart shows (e.g. eligible voters, Facebooks users, people over the age of 12, Canadian citizens, etc) Where: The geographic area the chart applies to (Ottawa, Canada, G7, G20, OECD) When the data was collected The data source (e.g. Statistics Canada T ..read more

1. Canada is a big country ...but not as big as one might think. Some maps show Canada as an enormous country, about twice the size of China or the US, similar in size to the entire continent of Africa: However maps like the one shown above distort the size of northern countries, making them appear much larger than they actually are. (This video explains why all world maps are wrong.) The "Peters projection" world map distorts the shape of countries, but shows their true size: Measured by total area Canada is just a little bigger than the US and China, making it the second largest country in ..read more

Here are the estimates for the Gini coefficients for Canada, taken from individual tax files (see here for more about where the data came from): As was the case for median incomes, I am encouraged by the fact that the benchmark Statistics Canada series and the tax file data say basically the same thing about the evolution of income inequality over the period in which they overlap: the Gini coefficient starts to increase from the late 70s/early 80s until about 2000 and then levels off. The tax file data suggest that there was a significant increase in inequality srting in the late 1950s, peak ..read more

Here are the estimates for average and median total incomes based on tax file data (see this post for details): I was comforted to see that the estimates for median incomes after 1976 have the same U-shape as those in the Statistics Canada tables : The fact that the two data sources say basically the same thing about what happened after 1976 gives me some hope that the tax file data before 1976 shouldn't be dismissed out of hand. And if you take them seriously, then it the fact that the Statistics Canada tables only start in 1976 is extremely unfortunate. If you start in 1976, you start with ..read more

Project Link has been updated; the Excel file with the data updated through to June 2021 is available here. I skipped the 2020 update for Project Link for a couple of reasons. There was obviously the distraction of the pandemic, but mainly because I hadn't yet finished the next extension. Every year, I try to extend the data base, and the latest extension took more time than I had originally expected. This year's extension is the data set behind this animation I posted on twitter a while ago; the details are below the fold.  The Statistics Canada data tables for the Canadian income distr ..read more

Suppose the government starts a Pay As You GO (unfunded) pension plan. What the young pay into the plan today is what the old take out today. The first generation gets lucky; they get a pension paid out, but never put anything in.  And if the plan ever gets wound up, the last generation of old get unlucky; they paid in, but never get anything out. Bitcoin is the same. What the young pay in to buy Bitcoin today is what the old take out when they sell Bitcoin today. The first generation gets lucky; they sell out at a high price, but bought in at a low price when it was just starting up.&nbs ..read more

In 2017, anyone with earnings was required to pay $4.95 in Canada Pension Plan contributions for every $100 of earnings (up to a maximum earnings threshold of $51,800 - rates here). For the employed, their $4.95 CPP/QPP contribution was matched by an equal contribution by their employer. However self-employed individuals are required to pay the entire employer+employee contribution themselves, amounting to $9.90 for every $100 of earnings. Now the self-employed have an out. They can incorporate, and pay themselves in dividends rather than salary. Since they are not required to pay CPP premiums ..read more

Canadian economist Richard Lipsey would always insist that the Phillips Curve is a curve, and not a straight line. Maybe because wages and prices are stickier down than up. Here's why that matters for macroeconomic policy: Suppose the central bank wants 2% inflation on average, over the longer term. One way to get that result would be to flip a coin, every year, or every decade, or whatever. If it's heads, the central bank "runs the economy hot", to get 3% inflation. And if it's tails, the central bank "runs the economy cold", to get 1% inflation. If the Phillips Curve were a straight line, yo ..read more

The following is a guest post by Mikal Skuterud of University of Waterloo On February 14, the Federal Government issued 27,332 invitations for permanent residency to Canadian Experience Class (CEC) applicants in the Express Entry pool. To issue this unprecedented level of invitations, Immigration, Refugees and Citizenship Canada (IRCC) reached deep into the pool, providing invitations to applicants with record-low Comprehensive Ranking System (CRS) scores.   The CRS is a points system used by IRCC to select the “best” candidates in the Express Entry pool. CRS scores are assigned to candid ..read more

The following is a guest post by Miguel Casares (Universidad Publica de Navarra, Spain), Paul Gomme (Concordia University), and Hashmat Khan (Carleton University) Of utmost importance is improving our understanding of the complex interactions between: (a) the epidemiology that describes the evolution of the coronavirus/COVID-19; and (b) the social and economic choices of individuals.  Towards this end, we have developed a model that captures some salient elements of this interaction. The parameters of the model are calibrated to match epidemiological and economic developments in Ontario i ..read more