Posts

• October 21, 2005

  Changes Regarding Noon Foreign Exchange Rates Effective 7 November 2005

  Beginning on 7 November 2005, the Bank of Canada will be implementing a number of changes directed towards achieving a more timely release of noon foreign exchange rates. These changes will be implemented on a six-month trial basis to allow the Bank to assess whether further refinements are required to ensure that these rates remain an accurate reflection of mid-day rates in wholesale markets.

  Content Type(s): Press, Market notices
• October 20, 2005

  Bank of Canada releases Monetary Policy Report

  Media Relations Ottawa, Ontario

  The Bank of Canada today released its October Monetary Policy Report, which discusses current economic and financial trends in the context of Canada's inflation-control strategy.

  Content Type(s): Press, Press releases
• October 20, 2005

  Release of the Monetary Policy Report

  Opening statement David Dodge

  In the report, we said that the global and Canadian economies have continued to grow at a solid pace, and our economy now appears to be operating at full production capacity. Past and recent movements in energy prices and in the exchange rate for the Canadian dollar, along with competitive pressures from China and other newly industrialized economies, are giving rise to significant ongoing adjustments in the Canadian economy.

  Content Type(s): Press, Speeches and appearances, Opening statements
• October 20, 2005

  Monetary Policy Report – October 2005

  

  The global economy has continued to grow at a robust pace since the July Monetary Policy Report Update.

  Content Type(s): Publications, Monetary Policy Report
• October 18, 2005

  What Drives Movements in Exchange Rates?

  Bank of Canada Review - Autumn 2005 Jeannine Bailliu, Michael R. King

  Understanding what causes the exchange rate to move has been on ongoing challenge for economists. Despite extensive research, traditional macro models of exchange rate determination—with the exception of the Bank of Canada's exchange rate equation—have typically not fared well, motivating economists to explore new ways to model exchange rate movements that incorporate more complex and realistic settings. Within the context of the sharp appreciation of the Canadian dollar in 2003 and 2004, Bailliu and King review the macroeconomic models of exchange rates, as well as the micro-structure studies that highlight the importance of trading mechanisms, information asymmetry, and investor heterogeneity for explaining short-term dynamics in exchange rates. In addition to summarizing the current state of knowledge, they highlight recent advances and identify promising alternative approaches.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Economic models, Exchange rates, Financial markets
• October 18, 2005

  Bank of Canada raises overnight rate target by 1/4 percentage point to 3 per cent

  Media Relations Ottawa, Ontario

  The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 3 per cent.

  Content Type(s): Press, Press releases
• October 7, 2005

  Business Outlook Survey - Autumn 2005

  Firms overall remain positive about the economic outlook.

  Content Type(s): Publications, Business Outlook Survey
• October 5, 2005

  The Exchange Rate and Canadian Inflation Targeting

  Bank of Canada Review - Autumn 2005 Christopher Ragan

  An essential element of the Bank of Canada's inflation-targeting framework is a floating exchange rate that is free to adjust in response to shocks that affect the Canadian and world economies. This floating rate plays an important role in the transmission mechanism for monetary policy. A practical question is how the Bank of Canada incorporates currency movements into the monetary policy decision-making process. Only after determining the cause and persistence of exchange rate change, and its likely net effect on aggregate demand, can the Bank decide on the appropriate policy response to keep inflation low, stable, and predictable. Ragan reviews the need to target inflation and the transmission mechanism for monetary policy, including the role of the exchange rate, before describing two types of exchange rate movements and their implications for monetary policy.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Exchange rates, Inflation targets, Monetary policy implementation

• Intertemporal Substitution in Macroeconomics: Evidence from a Two-Dimensional Labour Supply Model with Money

  Staff Working Paper 2005-30 Ali Dib, Louis Phaneuf

  The hypothesis of intertemporal substitution in labour supply has a history of empirical failure when confronted with aggregate time-series data.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Labour markets JEL Code(s): C, C5, C52, E, E2, E24, E3, E32, J, J2, J22

• Has Exchange Rate Pass-Through Really Declined in Canada?

  Staff Working Paper 2005-29 Hafedh Bouakez, Nooman Rebei

  Several empirical studies suggest that exchange rate pass-through has declined in recent years in industrialized countries.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Exchange rates, Inflation and prices, International topics JEL Code(s): F, F3, F4