Posts

• The Liquidity Trap: Evidence from Japan

  Staff Working Paper 1997-4 Isabelle Weberpals

  Japanese economic activity has been stagnant since the collapse of the speculative asset-price bubble in 1990, despite highly expansionary monetary policy which has brought interest rates down to record low levels. Although several reasons have been put forward to explain the sustained weakness of the Japanese economy, none is more intriguing from the viewpoint of a central bank than the possibility that monetary policy had been largely ineffective because the Japanese economy entered a Keynesian "liquidity trap."

  Content Type(s): Staff research, Staff working papers Topic(s): International topics, Recent economic and financial developments JEL Code(s): E, E4, E42, E5, E51, E52
• January 14, 1997

  Annual Report 1996

  

  In 1996 inflation remained within the Bank’s target range but was subject to downward pressure. The low rate of inflation contributed to a major easing in monetary conditions, and interest rates reached their lowest level in 30 years.

  Content Type(s): Publications, Annual Report
• January 11, 1997

  Bank of Canada Review - Winter 1996-1997

  

  Cover page

  P.N. Breton, Canadian numismatist

  The book, pamphlet, and advertising piece shown are part of the National Currency Collection, Bank of Canada.

  Photography by James Zagon.

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

• La courbe de Phillips au Canada : un examen de quelques hypothèses

  Staff Working Paper 1997-3 Jean-François Fillion, André Léonard

  This study, which draws on a variety of research on price dynamics in Canada, examines some hypotheses that might explain the poor quality of recent inflation forecasts based on the conventional Phillips curve.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Inflation targets JEL Code(s): C, C5, C52, E, E3, E31

• Fads or Bubbles?

  Staff Working Paper 1997-2 Huntley Schaller, Simon van Norden

  This paper tests between fads and bubbles using a new empirical strategy (based on switching-regression econometrics) for distinguishing between competing asset-pricing models. By extending the Blanchard and Watson (1982) model, we show how stochastic bubbles can lead to regime-switching in stock market returns.

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

• Reconsidering Cointegration in International Finance: Three Case Studies of Size Distortion in Finite Samples

  Staff Working Paper 1997-1 Marie-Josée Godbout, Simon van Norden

  This paper reconsiders several recently published but controversial results about the behaviour of exchange rates. In particular, it explores finite-sample problems in the application of cointegration tests and shows how these may have affected the conclusions of recent research.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods JEL Code(s): C, C1, C15, C2, C22, C3, C32, F, F3, F31