By Huw Lloyd Ellis, Queen’s University

Huw Lloyd Ellis is a Professor of Economics at Queen’s University. Here, he discusses the new STUDIO model developed by Queen’s University economists and Limestone Analytics for assessing the impact of COVID-19.

We all know it’s bad. COVID-19 and the lockdowns needed to counter it have created a global economic storm whose impact on Ontario since mid March has been more disruptive than any downturn that most of us have seen in our lifetimes. We’ve seen large downturns in the level of employment. A large fraction of those still employed are working from home and many of those still employed were working reduced hours.

Understanding the economic costs in terms of lost production from these adjustments is important for many reasons. Firstly, these costs translate into major losses in household incomes that may never be recouped. These losses are far from equally distributed and depend crucially on where people live and the industries in which they work. Secondly, the resulting loss in the tax base adds an additional strain on government finances over and above those created by increased spending to offset the size and impacts of layoffs and business distress. The ongoing losses in production today represent a permanent loss in economic wealth that will impact our future after-tax incomes for many years.

By Christopher Cotton and Neil Renwick

Christopher Cotton, Ph.D., is a Professor of Economics at Queen’s University where he holds the Jarislowsky-Deutsch Chair of Economic & Financial Policy and is the Director of the John Deutsch Institute for the Study of Economic Policy. Neil Renwick M.D., Ph.D, is a Clinician Scientist and Head of the Laboratory of Translational RNA Biology at Queen’s University and an Associate Attending Physician at The Rockefeller University Hospital in New York City. 

Last week, NY Governor Andrew Cuomo issued a plea to the rest of the country: “Help New York. We’re the ones hit right now… We need relief. We need relief for nurses working 12-hour shifts. We need relief for doctors. Help us now and we will return the favor.”

This request is based on the fact that states like New York, New Jersey, and Michigan are being hit hardest by the COVID-19 pandemic now, and are likely to see their apex in the next week or two, while other states are unlikely to reach their peak until later this spring. Today, as New York faces a shortage of health care workers, there are other places in the U.S. with excess medical capacity, where doctors and nurses not yet being pushed beyond their breaking point.

We claim such an argument not only applies to doctors and nurses but also applies to life-saving ventilators as well.Read More »

By Thorsten Koeppl

Thor Koeppl is a Professor of Economics and RBC Fellow at Queen’s University. He also serves as a Scholar and member of the National Council and Monetary Policy Council at the CD Howe Institute. 

Imagine you are driving your car on an alpine road.  You see some rocks starting to fall, a rockslide!  What do you do? Slam on the brakes.  Stop.  You take a deep breath and, after a sigh of relief that you kind of dodged it, you think: So, what’s next? How do I get past that rock slide?

This is where we are at in Canada in our response to the current CoVid-19 pandemic.  We brought the economy pretty much to a full stop.  It is fair to say that this reaction will likely save Canadians being fully engulfed in the rock slide.  We yet do not know how big the benefit will be in terms of lives saved or how large the costs will be on the economic side, but we did the right thing.  Act on the side of caution and hit the brakes.

Soon, hopefully, there comes the time to catch a breath and look forward to see how we can navigate the medium-run fall out from the pandemic.  And this is where economists and the way they tend to think can help us a lot.  After all, economists are “social engineers” that deal with problems where individual behaviour needs to be steered in the right direction to achieve better outcomes for society.Read More »

By Isabella Mira, Queen’s Law & Economics

Canada is a country built by immigrants. It is known for its multiculturalist approach to welcoming these newcomers and uses a points system to select immigrants. This method of screening has received much praise from economists and policy-makers alike for its ability to identify applicants that will answer the varying demands of the labor market. As an immigrant myself, this initial description is both reassuring and inspiring.

Yet a component often forgotten is that attracting and screening immigrants is only half the battle. Once they arrive, it is just as important to ensure immigrants’ skills and assets are properly integrated into the labour market and the Canadian economy.  Reports on Canada’s immigration policy reflects this gap in analysis by offering both positive and negative accounts of immigrant success in Canada. Statistics and articles such as OECD report a positive picture by stating that employment of foreign-born Canadian citizens has increased since 2008, and in 2012 Canada had the third highest employment rate for immigrants among the OECD member countries (Canada, 2014). In sharp contrast, articles by Ley and Smith (2008) discuss extensive immigrant poverty in gateway cities, Bloemraad (2006) speaks to non-economic factors such as possession of cultural knowledge as barriers to immigrant success, and Derwing et al. (2000) present the now-familiar issue of foreign credential recognition. These conflicting accounts invite questions as to the true success of Canada’s immigration policy.

In my M.A. essay, I propose an approach to reconcile these different accounts of immigrant labour market integration. I posit that the decision to ascend to citizenship acts as a signaling tool for employers.Read More »

By Gregor Smith, Queen’s University

The Canadian dollar (CAD) often is described as a ‘commodity currency’ or even as a ‘petrocurrency’.   The correlation between commodity prices and the value of the CAD features in daily commentary but you can see it in data at any frequency.

The figure below shows monthly data for the CAD/USD exchange rate along with the Bank of Canada’s commodity price index (reported in real USD) over the past thirty years.  Clearly, these two things tend to move together.Read More »