Publications

• August 11, 1996

  Bank of Canada Review - Summer 1996

  

  Cover page

  Home savings bank: The Northern Bank

  The savings bank shown here was issued to account holder 1859 by the Victoria, B.C. branch. It is part of the National Currency Collection, Bank of Canada.

  Photography by James Zagon.

  Content Type(s): Publications, Bank of Canada Review
• August 10, 1996

  Inflation expectations and Real Return Bonds

  Bank of Canada Review - Summer 1996 Agathe Côté, Jocelyn Jacob, John Nelmes, Miles Whittingham

  The existence of a market for Real Return Bonds in Canada provides a direct tool with which to measure market expectations of inflation by comparing the yields on these bonds with those on conventional Government of Canada long-term bonds. However, there are other factors besides inflation expectations that may affect the yield differential. After reviewing these factors, the authors note that they can lead to a potentially large bias in the level of inflation expectations. The changes in the differential over time may, nonetheless, be a good indicator of movements in long-run inflation expectations. Based on this measure, expectations of long-run inflation have declined since late 1994.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Interest rates
• May 20, 1996

  Monetary Policy Report – May 1996

  This Report presents the Bank of Canada’s assessment of the trend of inflation in Canada and explains the monetary policy actions deemed necessary to keep inflation within the Bank’s inflation-control target range.

  Content Type(s): Publications, Monetary Policy Report
• May 17, 1996

  The Transmission of Monetary Policy

  Gordon Thiessen, Bruce Montador, Kevin Clinton, Kevin Fettig, Donna Howard, Charles Freedman, Pierre Duguay, Stephen S. Poloz, Tim Noël

  Text of major 1995 lecture by Bank Governor Gordon Thiessen, plus articles from Bank of Canada Review and other sources

  Content Type(s): Publications, Books and monographs Topic(s): Monetary policy transmission JEL Code(s): E, E5
• May 11, 1996

  Recent developments in monetary aggregates and their implications

  Bank of Canada Review - Spring 1996 Louis-Robert Lafleur, Walter Engert

  In 1995, the broad aggregate M2+ grew at an annual rate of 4.5 per cent—almost twice the rate recorded in 1994—as competition from mutual funds drew less money from personal savings deposits. An adjusted M2+ aggregate, which internalizes the effect of close substitutes such as CSBs and certain mutual funds, grew by only 3.4 per cent. Gross M1 grew by 8.2 per cent during the year, reflecting an increased demand for transactions balances as market interest rates declined and as banks offered more attractive rates of interest on corporate current account balances. The robust growth of gross M1 in the second half of 1995 suggests a moderate expansion of economic activity in the first half of 1996, while moderate growth in the broad aggregates indicates a rate of monetary expansion consistent with continued low inflation. In this annual review of the monetary aggregates, the authors also introduce a new model, based on calculated deviations of M1 from its long-run demand, which suggests that inflation should remain just below the midpoint of the inflation-control target range over the next couple of years.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Monetary aggregates, Recent economic and financial developments
• May 11, 1996

  Bank of Canada Review - Spring 1996

  

  Cover page

  Danzig: 20-gulden note, 1932

  This note is part of the National Currency Collection, Bank of Canada.

  Photography by James Zagon.

  Content Type(s): Publications, Bank of Canada Review
• May 10, 1996

  Financing activities of provincial governments and their enterprises

  Bank of Canada Review - Spring 1996 Philip Wooldridge

  This article examines the changes that have occurred in the composition of funds raised by provincial borrowers during the 1990s. Higher financing requirements, coupled with the declining availability of funds from non-market sources such as the Canada Pension Plan, led provincial governments and their Crown corporations to broaden and to diversify their debt management programs. In particular, provincial borrowers expanded their presence in foreign bond markets, increased their issuance of floating-rate debt, and incorporated a wide variety of innovative debt instruments into their borrowing programs in order to minimize their borrowing costs and to manage the risks associated with the issuing of debt. As a result, the composition of funds raised by provincial borrowers during the 1990s differed markedly from that of the previous decade: between 1990 and 1995, provincial borrowing requirements were met almost entirely through the issuance of marketable debt, and net new foreign currency debt issues averaged nearly 50 per cent of funds raised, whereas between 1980 and 1989, non-market sources provided close to 30 per cent of funds raised, and net new foreign currency debt issues provided less than 20 per cent.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Debt management, Fiscal policy
• May 9, 1996

  The role of inventory management in Canadian economic fluctuations

  Bank of Canada Review - Spring 1996 Hung-Hay Lau

  Swings in inventory investment have traditionally played a major role in Canadian business cycles. However, advances in inventory-control techniques and the reduced uncertainty associated with lower inflation have enabled firms to manage their inventories much more tightly and effectively. This article examines recent developments in the management of non-farm business inventories in Canada at both the aggregate and the sectoral level and looks at implications for the role of inventories as a source of economic fluctuation.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Domestic demand and components
• January 10, 1996

  Bank of Canada Review - Winter 1995-1996

  

  Cover page

  Canada, gold Maple Leaf, 1985

  The Maple Leaf, which is larger than the circulating dollar coin, is part of the National Currency Collection of the Bank of Canada.

  Photography by James Zagon.

  Content Type(s): Publications, Bank of Canada Review