E52 - Monetary Policy

• The Zero Bound on Nominal Interest Rates: How Important Is It?

  Staff Working Paper 2001-6 David Amirault, Brian O'Reilly

  This paper surveys the literature on the zero bound on the nominal interest rate. It addresses questions ranging from the conditions under which the zero bound on the nominal interest rate might occur to policy options to avoid or use to exit from such a situation. We discuss literature that examines historical and country evidence, and literature that uses models to generate evidence on this question.

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Inflation targets, Monetary policy transmission JEL Code(s): E, E3, E31, E5, E52, E58, E6, E61

• On Commodity-Sensitive Currencies and Inflation Targeting

  Staff Working Paper 2001-3 Kevin Clinton

  Two aspects of the recent monetary history of Canada, Australia, and New Zealand stand out: the sensitivity of their dollars to prices of resource-based commodities, and inflation targeting. This paper explores various aspects of these phenomena.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Inflation targets, International topics, Monetary policy implementation JEL Code(s): E, E3, E31, E5, E52, F, F3, F31, F4, F42

• Identifying Policy-makers' Objectives: An Application to the Bank of Canada

  Staff Working Paper 2000-11 Nicholas Rowe, James Yetman

  In this paper, we develop a new way to test hypotheses about policy-makers' targets, and we implement that test for Canadian monetary policy.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation targets JEL Code(s): E, E5, E52, E6, E61

• Probing Potential Output: Monetary Policy, Credibility, and Optimal Learning under Uncertainty

  Staff Working Paper 2000-10 James Yetman

  The effective conduct of monetary policy is complicated by uncertainty about the level of potential output, and thus about the size of the monetary policy response that would be sufficient to achieve the targeted inflation rate. One possible response to such uncertainty is for the monetary authority to "probe," interpreted here as actively using its policy response to learn about the level of potential output.

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Monetary policy and uncertainty, Potential output JEL Code(s): E, E5, E52, E58

• Greater Transparency in Monetary Policy: Impact on Financial Markets

  Technical Report No. 86 Philippe Muller, Mark Zelmer

  Measures have been taken by the Bank of Canada to increase the transparency of Canadian monetary policy. This paper examines whether the greater transparency has improved financial markets' understanding of the conduct of monetary policy.

  Content Type(s): Staff research, Technical reports Topic(s): Financial markets, Monetary policy implementation JEL Code(s): E, E5, E52, E58, G, G1, G14

• Monetary Rules When Economic Behaviour Changes

  Staff Working Paper 1999-8 Robert Amano, Donald Coletti, Tiff Macklem

  This paper examines the implications of changes in economic behaviour for simple inflation-forecast–based monetary rules of the type currently used at two inflation-targeting central banks. Three types of changes in economic behaviour are considered, changes that are motivated by developments in monetary and fiscal policy in the 1990s: changes in monetary policy credibility, changes in […]

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Monetary policy and uncertainty, Monetary policy framework JEL Code(s): E, E5, E52

• The Quantity of Money and Monetary Policy

  Staff Working Paper 1999-5 David Laidler

  The relationships among the quantity theory of money, monetarism and policy regimes based on money-growth and inflation targeting are briefly discussed as a prelude to an exposition of alternative views of money's role in the transmission mechanism of monetary policy. The passive-money view treats the money supply as an endogenous variable that plays no role […]

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary aggregates, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E5, E51, E52

• Inflation Targeting under Uncertainty

  Technical Report No. 85 Gabriel Srour

  This paper studies the implications of certain kinds of uncertainty for monetary policy. It first describes the optimum policy rule in a simple model of the transmission mechanism as in Ball and Svensson.

  Content Type(s): Staff research, Technical reports Topic(s): Monetary policy and uncertainty, Monetary policy framework JEL Code(s): E, E5, E52

• The Exchange Rate Regime and Canada's Monetary Order

  Staff Working Paper 1999-7 David Laidler

  It is a mistake to debate the merits of alternative exchange rate regimes for Canada independently of other features of the monetary order. A coherent order requires a well-defined goal for monetary policy, one that the authorities are capable of achieving, and that anchors private sector expectations. For it to be liberal, the relevant authorities […]

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Monetary policy framework JEL Code(s): E, E5, E52, F, F3, F31

• Un examen de la crédibilité de la politique monétaire au Canada

  Staff Working Paper 1998-12 Patrick Perrier

  In this study, the author uses survey data on inflationary expectations to obtain information about the credibility of Canada's monetary policy. By comparing the differences between the forecasts made by survey participants with the targets set by the Bank of Canada for the 1992-1996 period (the period covered by the study), it was possible to […]

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