Staff working papers

• A Further Analysis of Exchange Rate Targeting in Canada

  Staff Working Paper 1994-2 Robert Amano, Tony S. Wirjanto

  In a recent paper Mercenier and Sekkat (1988) conclude that the Bank of Canada has followed a policy of exchange rate targeting using the money supply. We re-examine their results using a different estimation approach and with different assumptions about the forcing process of the exogenous variables.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates

• Optimum Currency Areas and Shock Asymmetry: A Comparison of Europe and the United States

  Staff Working Paper 1994-1 Nick Chamie, Alain DeSerres, René Lalonde

  Since the early 1980s, models based on economic fundamentals have been poor at explaining the movements in the exchange rate (Messe 1990). In response to this problem, Frankel and Froot (1988) developed a model that uses two approaches to forecast the exchange rate: the fundamentalist approach, which bases the forecast on economic fundamentals, and the chartist approach, which bases the forecast on the past behaviour of the exchange rate.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Financial markets JEL Code(s): C, C4, C40, G, G1, G12