Bank of Canada Review - Autumn 1995

November 10, 1995
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BoC Review - Autumn 1995/Revue BdC - Automne 1995

Cover page

Mauritius, 10 rupees, 1971

Slightly smaller than a Canadian silver dollar and struck in copper-nickel, the coin shown on the cover is part of of the National Currency Collection of the Bank of Canada.

Photography by James Zagon.
Content Type(s): Publications, Bank of Canada Review
November 10, 1995

The Government of Canada bond market since 1980

Bank of Canada Review - Autumn 1995 Andrew Branion
This article focusses on a key component of the federal government's debt-management program, Government of Canada marketable bonds. It first provides a broad overview of the characteristics of these bonds and then discusses the workings of the domestic market, from the formulation of a debt-management strategy to the primary issuance of the bonds, the delivery and payment process, and transactions in the secondary market. Recent developments that have enhanced the overall efficiency of the market are also examined. This article is part of a series that describes and analyses features of the Canadian financial sector.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial markets
November 9, 1995

The effect of foreign demand shocks on the Canadian economy: An analysis using QPM

Bank of Canada Review - Autumn 1995 Benjamin Hunt
Historically, rapid and unsustainable increases in the demand for goods and services originating within the economies of Canada's major trading partners have had a significant impact on the domestic economy. These episodes are typically characterized by increases in world commodity prices and by a tightening of monetary conditions abroad to contain inflationary pressures. In this article, the author uses the Bank's quarterly projection model (QPM) (described in the autumn 1994 issue of the Review) to trace the mechanisms that transmit these foreign developments throughout the Canadian economy. In addition, he outlines the response that is required from domestic monetary authorities to maintain a target rate of inflation.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Recent economic and financial developments
November 8, 1995

The role of monetary conditions and the monetary conditions index in the conduct of policy

Bank of Canada Review - Autumn 1995 Charles Freedman
In these excerpts from a presentation to a conference in Toronto, Deputy Governor Charles Freedman analyses the way in which the monetary conditions index (MCI) enters into the Bank's thinking and actions. He describes how the Bank works in the context of a forward-looking assessment of economic developments and inflationary pressures to decide upon a desired path for the MCI that will result in a rate of inflation, six to eight quarters ahead, that is within the Bank's target band. Mr. Freedman also uses specific examples to explain how various shocks to the economy can change the Bank's desired path for monetary conditions. He describes the role that tactical considerations relating to market circumstances play regarding the timing of Bank actions to bring monetary conditions onto the desired path and emphasizes the need to give precedence to steadying nervous markets.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Monetary conditions index