Steve Ambler - Latest

• April 8, 2009

  Price-Level Targeting and Stabilization Policy: A Review

  Bank of Canada Review - Spring 2009 Steve Ambler

  This article reviews arguments in the literature for and against price-level targeting, focusing on its costs and benefits compared with inflation targeting. Benefits of price-level targeting include the effect on forward-looking inflation expectations; the ability to substitute for commitment by a central bank to its future policies; lessening forecast errors; better economic performance in response to real shocks because of lower wage indexation; and a reduction in the problem of the zero lower bound on nominal interest rates.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation and prices, Inflation: costs and benefits, Monetary policy framework
• December 14, 2007

  The Costs of Inflation in New Keynesian Models

  Bank of Canada Review - Winter 2007-2008 Steve Ambler

  Ambler describes three new channels through which inflation affects economic welfare in New Keynesian models. These channels were absent from traditional analyses and may have caused researchers to underestimate the costs associated with variable inflation, even at relatively low levels of inflation. The article concludes with a preliminary assessment of the quantitative importance of the new channels and their significance for monetary policy.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation: costs and benefits, Monetary policy framework

• Price-Level Targeting and Stabilization Policy: A Review

  Staff Discussion Paper 2007-11 Steve Ambler

  The author surveys recent articles on the costs and benefits of price-level targeting versus inflation targeting, focusing on the benefits and costs of price-level targeting as a tool for stabilization policy. He reviews papers that examine how price-level targeting affects the short-run trade-off between output and inflation variability by influencing expectations of future inflation. The […]

  Content Type(s): Staff research, Staff discussion papers Topic(s): Monetary policy framework JEL Code(s): E, E3, E31, E32, E5, E52

• Time-Consistent Control in Non-Linear Models

  Staff Working Paper 2007-3 Steve Ambler, Florian Pelgrin

  We show how to use optimal control theory to derive optimal time-consistent Markov-perfect government policies in nonlinear dynamic general equilibrium models, extending the result of Cohen and Michel (1988) for models with quadratic objective functions and linear dynamics. We replace private agents' costates by flexible functions of current states in the government's maximization problem.

  Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Monetary policy framework JEL Code(s): C, C6, C63, E, E6, E61, E62

• The Macroeconomic Effects of Non-Zero Trend Inflation

  Staff Working Paper 2006-34 Robert Amano, Steve Ambler, Nooman Rebei

  The authors study the macroeconomic effects of non-zero trend inflation in a simple dynamic stochastic general-equilibrium model with sticky prices.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Inflation and prices, Inflation targets JEL Code(s): E, E2, E24, E3, E32

• Optimal Taylor Rules in an Estimated Model of a Small Open Economy

  Staff Working Paper 2004-36 Steve Ambler, Ali Dib, Nooman Rebei

  The authors compute welfare-maximizing Taylor rules in a dynamic general-equilibrium model of a small open economy.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Exchange rates, Inflation targets JEL Code(s): F, F2, F3, F31, F33

• Nominal Rigidities and Exchange Rate Pass-Through in a Structural Model of a Small Open Economy

  Staff Working Paper 2003-29 Steve Ambler, Ali Dib, Nooman Rebei

  The authors analyze exchange rate pass-through in an estimated structural model of a small open economy that incorporates three types of nominal rigidity (wages and the prices of domestically produced and imported goods) and eight different structural shocks. The model is estimated using quarterly data from Canada and the United States.

  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, F2, F3, F31, F33