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Articles by Marc Lee

An Analysis of Financial Flows in the Canadian Economy

July 5, 2018

An essential but perhaps overlooked way of looking at the economy is a sector financial balance approach. Pioneered by the late UK economist Wynne Godley, this approach starts with National Accounts data (called Financial Flow Accounts) for four broad sectors of the economy: households, corporations, government and non-residents.
Here’s how it works: in any given quarter or year each sector can be a net borrower or lender, but the sum of the four sectors’ borrowing/lending must equal to zero. This is an accounting identity reflecting the fact that one sector’s borrowing must be another’s (or the combination of all others’) lending.
Consider a government deficit. The flip side of that deficit is that some other sector(s) is in credit by the same amount. For example, a $1 billion in

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Rethinking the economics of extreme events

May 15, 2018

Review of Worst-Case Economics: Extreme Events in Climate and Finance by Frank Ackerman
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Long ago economics was termed “the dismal science,” but in recent years that title has arguably been passed on to climate science, with its regular and dire warnings that humanity needs to rapidly transition off of its use of fossil fuels for energy. In the face of such calls to action, progress has been frustratingly slow. The 2015 Paris Agreement offers some hope, as does the small-but-growing share of renewable technologies, but by and large countries are not doing enough to meet Paris’ grand aspiration of keeping temperature increase between 1.5 and 2 degrees above pre-industrial levels.
Our collective inability to rise to the climate challenge may be related to our inability to imagine the

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Gimme shelter: is Core Housing Need a useful measure?

November 27, 2017

For a new CCPA blog post on housing (un)affordability, I dove into the latest Census data for Metro Vancouver. I used two series on shelter cost and shelter-to-income ratio, and found that 32% of households were paying more than 30% of income on shelter (all households, owners and renters) and 16% of households more than 50% of income on shelter. The latter number is pretty alarming: one in six households in Vancouver paying more than half their income just to keep a roof over their heads; that’s 150,430 households!
Then I noticed that “core housing need” (CHN) in Metro Vancouver was 17.6%, a figure that is way lower. I have always understood CHN as three dimensions: affordability, measured as households paying more than 30% of income; adequacy, whether the housing is in need of repair;

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Lessons from the Reagan Era on Managing Twin Deficits

February 14, 2017

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Extracted Carbon: Re-examining Canada’s contribution to climate change through fossil fuel exports

January 25, 2017

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