Staff research

• Measuring the Profitability and Effectiveness of Foreign Exchange Market Intervention: Some Canadian Evidence

  Technical Report No. 53 John Murray, Mark Zelmer, Shane Williamson

  When the major industrial countries decided to move to a system of managed flexible exchange rates following the collapse of the Bretton Woods system, many observers thought that this would reduce, if not eliminate, the need for official foreign exchange market intervention. During the past fifteen years, however, intervention in most countries, including Canada, has […]

  Content Type(s): Staff research, Technical reports Topic(s): Exchange rates JEL Code(s): F, F3, F31, G, G1, G14

• International Interest Rate Linkages and Monetary Policy: A Canadian Perspective

  Technical Report No. 52 John Murray, Ritha Khemani

  This paper examines the implications of increased international capital mobility and asset substitutability for domestic monetary policy in a small open economy such as Canada. Alternative definitions of international financial market integration are presented and tested in the context of two popular macro models. In the main, results suggest that interest rate relationships in Canada […]

  Content Type(s): Staff research, Technical reports Topic(s): Interest rates, International topics JEL Code(s): E, E5, E50, F, F3, F33

• Regional Disparities in Wage and Unemployment Rates in Canada: A Review of Some Issues

  Technical Report No. 51 Kathleen Day

  In this report the author considers three issues relating to regional disparities in Canada. First, the size of regional disparities in unemployment and wage rates is examined together with the patterns in these disparities over time. Next, various theories related to the causes of regional disparities are reviewed, focussing on their predictions regarding regional disparities […]

  Content Type(s): Staff research, Technical reports Topic(s): Labour markets, Regional economic developments JEL Code(s): E, E2, E24

• The NAIRU in Canada: Concepts, Determinants and Estimates

  Technical Report No. 50 David Rose

  An important question that faces macroeconomic policy makers is whether the economy can absorb increases in aggregate demand without generating inflationary pressures. Many economists have found it useful to approach this issue by asking whether the economy is operating at a rate of unemployment consistent with inflation neither accelerating nor decelerating, all else being equal. […]

  Content Type(s): Staff research, Technical reports Topic(s): Labour markets JEL Code(s): E, E2, E24

• An Analysis of the Information Content of Alternative Credit Aggregates

  Technical Report No. 49 Leslie Milton

  This study evaluates the information content of 25 measures of credit with respect to three macroeconomic variables—nominal spending, real spending and prices. Initially, simple descriptive techniques are used to assess the contemporaneous and leading relationships between the credit aggregates and the three goal variables. Next, bivariate vector autoregression models are constructed by regressing each of […]

  Content Type(s): Staff research, Technical reports Topic(s): Credit and credit aggregates JEL Code(s): E, E5, E51

• An Analysis of the Information Content of Alternative Monetary Aggregates

  Technical Report No. 48 Doug Hostland, Stephen S. Poloz, Paul Storer

  In this study the authors compare the information content of alternative monetary aggregates with respect to total spending in the economy, using data for Canada. The analysis considers 46 monetary measures, about half of which constitute conventional summation aggregates, while the remainder are superlative indices of monetary services based on the Fisher Ideal formula. The […]

  Content Type(s): Staff research, Technical reports Topic(s): Monetary aggregates JEL Code(s): E, E5, E51

• Les effets macroéconomiques des déficits budgétaires : résultats d'un modèle de simulation

  Technical Report No. 47 Pierre Duguay, Yves Rabeau

  An increase in a government deficit can have two effects: short-term stimulation of aggregate demand and employment, and long-term contraction of potential output. In this paper, these effects are illustrated using a dynamic, macroeconomic simulation model. The model is not a forecasting tool; it is intended to bridge the gap between Keynesian and supply-side economics […]

  Content Type(s): Staff research, Technical reports Topic(s): Economic models, Fiscal policy JEL Code(s): H, H6, H60

• A VAR Analysis of Economic Interdependence: Canada, the United States, and the Rest of the World

  Technical Report No. 46 John Kuszczak, John Murray

  The authors use vector autoregression (VAR) modelling techniques to examine the response of the domestic economy to foreign influences and to quantify some of the concepts and relationships relating to economic interdependence. Particular attention is given to the dynamic behaviour and interactions of the U.S. and Canadian economies over the past twenty years. Extensive empirical […]

  Content Type(s): Staff research, Technical reports Topic(s): International topics JEL Code(s): F, F1, F15, F4, F41

• Regulation of Financial Institutions: A Functional Analysis

  Technical Report No. 45 John Chant

  This study has three main objectives: First, to examine the reasons for the existence of financial institutions that simultaneously lend to one group and borrow from another; second, to analyze the reasons for the special treatment of these institutions in terms of the regulation that governs their activities; and third, to assess the types of […]

  Content Type(s): Staff research, Technical reports Topic(s): Financial institutions JEL Code(s): G, G2, G28

• International Capital Mobility and Asset Substitutability: Some Theory and Evidence on Recent Structural Changes

  Technical Report No. 44 Francesco Caramazza, Kevin Clinton, Agathe Côté, David Longworth

  This study examines different aspects of the international integration of capital markets. In particular, it attempts to determine whether the changes in controls and regulatory policies that have occurred in the past decade have been associated with a greater degree of market integration.

  Content Type(s): Staff research, Technical reports Topic(s): Balance of payments and components, Financial markets JEL Code(s): F, F2, F20, G, G1, G11, G15