E52 - Monetary Policy

• Short-Run and Long-Run Causality between Monetary Policy Variables and Stock Prices

  Staff Working Paper 2006-39 Jean-Marie Dufour, David Tessier

  The authors examine simultaneously the causal links connecting monetary policy variables, real activity, and stock returns.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary and financial indicators JEL Code(s): C, C1, C12, C15, C3, C32, C5, C51, C53, E, E5, E52

• The Welfare Implications of Inflation versus Price-Level Targeting in a Two-Sector, Small Open Economy

  Staff Working Paper 2006-12 Eva Ortega, Nooman Rebei

  The authors analyze the welfare implications of simple monetary policy rules in the context of an estimated model of a small open economy for Canada with traded and non-traded goods, and with sticky prices and wages.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Exchange rates, Inflation targets JEL Code(s): E, E3, E31, E32, E5, E52

• The Federal Reserve's Dual Mandate: A Time-Varying Monetary Policy Priority Index for the United States

  Staff Working Paper 2006-11 René Lalonde, Nicolas Parent

  In the United States, the Federal Reserve has a dual mandate of promoting stable inflation and maximum employment. Since the Fed directly controls only one instrument - the federal funds rate - the authors argue that the Fed's priorities continuously alternate between inflation and economic activity.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Monetary policy framework, Monetary policy implementation JEL Code(s): C, C2, C22, C5, C52, E, E5, E52

• The 1975–78 Anti-Inflation Program in Retrospect

  Staff Working Paper 2005-43 John Sargent

  The author provides an overview of the 1975–78 Anti-Inflation Program (AIP), in a background document prepared for a seminar organized by the Bank of Canada to mark the AIP's 30th anniversary.

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Fiscal policy, Inflation and prices, Inflation targets, Monetary policy framework, Monetary policy implementation JEL Code(s): E, E3, E31, E5, E52, E6, E63, E64, E65

• Measurement Bias in the Canadian Consumer Price Index

  Staff Working Paper 2005-39 James Rossiter

  The consumer price index (CPI) is the most commonly used measure of inflation in Canada.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Inflation targets JEL Code(s): E, E3, E31, E5, E52

• The Canadian Macroeconomy and the Yield Curve: An Equilibrium-Based Approach

  Staff Working Paper 2005-36 René Garcia, Richard Luger

  The authors develop and estimate an equilibrium-based model of the Canadian term structure of interest rates.

  Content Type(s): Staff research, Staff working papers Topic(s): Interest rates JEL Code(s): E, E4, E43, E44, E47, E5, E52

• The Exchange Rate and Canadian Inflation Targeting

  Staff Working Paper 2005-34 Christopher Ragan

  The author provides a non-technical explanation of the role played by the exchange rate in Canada's inflation-targeting monetary policy.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Inflation targets, Monetary policy implementation JEL Code(s): E, E5, E50, E52, F, F4, F41

• Endogenous Central Bank Credibility in a Small Forward-Looking Model of the U.S. Economy

  Staff Working Paper 2005-16 René Lalonde

  The linkages between inflation and the economy's cyclical position are thought to be strongly affected by the credibility of monetary authorities.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Inflation and prices, Monetary policy transmission JEL Code(s): C, C3, C32, E, E5, E52

• The Implications of Transmission and Information Lags for the Stabilization Bias and Optimal Delegation

  Staff Working Paper 2004-37 Jean-Paul Lam, Florian Pelgrin

  In two recent papers, Jensen (2002) and Walsh (2003), using a hybrid New Keynesian model, demonstrate that a regime that targets either nominal income growth or the change in the output gap can effectively replicate the outcome under commitment and hence reduce the size of the stabilization bias.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation targets, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E62

• Financial Conditions Indexes for Canada

  Staff Working Paper 2004-22 Céline Gauthier, Christopher Graham, Ying Liu

  The authors construct three financial conditions indexes (FCIs) for Canada based on three approaches: an IS-curve-based model, generalized impulse-response functions, and factor analysis.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary and financial indicators, Monetary conditions index JEL Code(s): E, E4, E44, E5, E52