Carolyn A. Wilkins - Latest

• Linear and Threshold Forecasts of Output and Inflation with Stock and Housing Prices

  Staff Working Paper 2006-25 Greg Tkacz, Carolyn A. Wilkins

  The authors examine whether simple measures of Canadian equity and housing price misalignments contain leading information about output growth and inflation.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Inflation and prices JEL Code(s): C, C5, C53, E, E4
• June 2, 2006

  Another Look at the Inflation-Target Horizon

  Bank of Canada Review - Summer 2006 Donald Coletti, Jack Selody, Carolyn A. Wilkins

  The conduct of monetary policy within an inflation-targeting framework requires the establishment of an inflation-target horizon, which is the average time it takes inflation to return to the target. Policy-makers have an interest in communicating this horizon, since it is likely to help anchor inflation expectations. This article focuses on the determination of the appropriate policy horizon by reporting on two recent Bank of Canada studies. The evidence suggests that the current target horizon of six to eight quarters remains appropriate. It is important to note that the duration of the optimal inflation-target horizon varies widely, depending on the combination of shocks to the economy. In rare cases when the financial accelerator is triggered by a persistent shock, such as an asset-price bubble, it may be appropriate to take a longer view of the inflation-target horizon.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation targets, Monetary policy framework, Monetary policy transmission