Staff research

• Changes in the Inflation Process in Canada: Evidence and Implications

  Staff Working Paper 1995-5 Doug Hostland

  The Canadian economy is currently in transition from a period of disinflation to one with a very low and relatively stable inflation rate. Against this background, the author asks whether reduced-form parameters should be expected to be invariant to changes in the inflation process. This raises two empirical issues. The first relates to whether shifts […]

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices

• Government Debt and Deficits In Canada: A Macro Simulation Analysis

  Staff Working Paper 1995-4 Tiff Macklem, David Rose, Robert Tetlow

  This paper examines the macroeconomic implications of rising government debt in Canada and the short-run costs and long-run benefits of stemming the rise. The discussion begins with an evaluation of the long-run consequences of increasing government indebtedness, first based on the simple arithmetic of the government's long-run budget constraint, and then based on simulations of […]

  Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy

• Empirical Evidence on the Cost of Adjustment and Dynamic Labour Demand

  Staff Working Paper 1995-3 Robert Amano

  In this paper the author examines whether there is significant evidence of the effect of adjustment costs on Canadian labour demand. This is an important question, as sluggish adjustment of labour demand resulting from significant adjustment costs may be one factor that could help explain some of the unemployment persistence found in Canadian data. The […]

  Content Type(s): Staff research, Staff working papers Topic(s): Labour markets

• Estimating and Projecting Potential Output Using Structural VAR Methodology: The Case of the Mexican Economy

  Staff Working Paper 1995-2 Alain DeSerres, Alain Guay, Pierre St-Amant

  In this paper the authors show how potential output can be estimated and projected through an approach derived from the structural vector autoregression methodology. This approach is applied to the Mexican economy. To identify demand, supply and world oil shocks, the authors assume that demand shocks do not have a permanent effect on output and […]

  Content Type(s): Staff research, Staff working papers Topic(s): International topics, Potential output

• The Bank of Canada's New Quarterly Projection Model, Part 2. A Robust Method for Simulating Forward-Looking Models

  Technical Report No. 73 John Armstrong, Richard Black, Douglas Laxton, David Rose

  In this report, we describe methods for solving economic models when expectations are presumed to have at least some element of consistency with the predictions of the model itself. We present analytical results that establish the convergence properties of alternative solution procedures for linear models with unique solutions. Only one method is guaranteed to converge, […]

  Content Type(s): Staff research, Technical reports Topic(s): Economic models JEL Code(s): C, C3, C32, C5, C53

• Deriving Agents' Inflation Forecasts from the Term Structure of Interest Rates

  Staff Working Paper 1995-1 Christopher Ragan

  In this paper, the author uses the term structure of nominal interest rates to construct estimates of agents' expectations of inflation over several medium-term forecast horizons. The Expectations Hypothesis is imposed together with the assumption that expected future real interest rates are given by current real rates. Under these maintained assumptions, it is possible to […]

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Interest rates

• Searching for the Liquidity Effect in Canada

  Staff Working Paper 1994-12 Ben Fung, Rohit Gupta

  This paper examines the empirical evidence of the liquidity effect in Canada. In the presence of the liquidity effect, the initial impact of an unanticipated expansionary monetary policy is to lower nominal and real interest rates for a short period of time.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary aggregates

• The Causes of Unemployment in Canada: A Review of the Evidence

  Staff Working Paper 1994-11 Stephen S. Poloz

  This paper reviews various competing theories of structural unemployment and considers whether they may be used to explain any of the rise in unemployment experienced by Canada during the most recent economic cycle.

  Content Type(s): Staff research, Staff working papers Topic(s): Labour markets

• Les provinces canadiennes et la convergence : une évaluation empirique

  Staff Working Paper 1994-10 Mario Lefebvre

  This paper examines whether the hypothesis of economic convergence holds for the Canadian provinces. Using data on real gross domestic product per capita and on factor productivity from 1966 to 1992, the paper shows, using two different methods, that the convergence hypothesis cannot be rejected. This evidence supports the findings of other authors who have studied convergence among Canadian provinces.

  Content Type(s): Staff research, Staff working papers Topic(s): Recent economic and financial developments

• Symétrie des chocs touchant les régions canadiennes et choix d'un régime de change

  Staff Working Paper 1994-9 Alain DeSerres, René Lalonde

  The authors attempt to determine whether the primary advantage of the flexible exchange rate between Canada and the United States—the rapid adjustment of the real exchange rate following an asymmetrical shock—is as evident at the regional as at the national level.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates