E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

• The Zero Bound on Nominal Interest Rates: Implications for the Optimal Monetary Policy in Canada

  Staff Discussion Paper 2007-1 Claude Lavoie, Hope Pioro

  The authors assess the performance of the Canadian economy under a variety of interest rate rules when the zero bound on nominal interest rates can bind. Their assessment is based on numerical simulations of a dynamic stochastic general-equilibrium model in a stochastic environment. Consistent with the literature, the authors find that the probability and consequences […]

  Content Type(s): Staff research, Staff discussion papers Topic(s): Inflation: costs and benefits, Interest rates, Monetary policy framework JEL Code(s): E, E4, E43, E47, E5, E52

• Perhaps the FOMC Did What It Said It Did: An Alternative Interpretation of the Great Inflation

  Staff Working Paper 2007-19 Sharon Kozicki, P. A. Tinsley

  This paper uses real-time briefing forecasts prepared for the Federal Open Market Committee (FOMC) to provide estimates of historical changes in the design of U.S. monetary policy and in the implied central-bank target for inflation. Empirical results support a description of policy with an effective inflation target of roughly 7 percent in the 1970s.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Monetary aggregates, Monetary policy implementation JEL Code(s): E, E3, E5, N, N1

• Central Bank Performance under Inflation Targeting

  Staff Working Paper 2007-18 Marc-André Gosselin

  The inflation targeting (IT) regime is 17 years old. With practice of IT now in more than 21 countries, there is enough evidence gathered to take stock of the IT experience. In this paper, we analyze the inflation record of IT central banks.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Inflation targets, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52, E58

• Uncollateralized Overnight Loans Settled in LVTS

  Staff Working Paper 2007-11 Scott Hendry, Nadja Kamhi

  Loan-level data on the uncollateralized overnight loan market is generated using payment data from Canada's Large Value Transfer System (LVTS) and a modified version of the methodology proposed in Furfine (1999). There were on average just under 100 loans extended in this market each day from March 2004 to March 2006 for a total daily value of about $5 billion.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Interest rates JEL Code(s): E, E4, E44, E5, E50, G, G1, G12

• Do We Need the IMF to Resolve a Crisis? Lessons from Past Episodes of Debt Restructuring

  Staff Working Paper 2007-10 Philipp Maier

  This study investigate how debt restructurings have evolved over the decades. Debtors and creditors have a long history of engaging an outsider – a “third party”, such as the IMF – to organise and facilitate debt restructurings.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial stability, International topics JEL Code(s): E, E5, F, F3, N, N1, N2

• Monetary Policy Committees in Action: Is There Room for Improvement?

  Staff Working Paper 2007-6 Philipp Maier

  More than 80 central banks use a committee to take monetary policy decisions. The composition of the committee and the structure of the meeting can affect the quality of the decision making.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Monetary policy framework JEL Code(s): C, C9, C92, D, D7, D70, E, E5, E58

• Survey-Based Estimates of the Term Structure of Expected U.S. Inflation

  Staff Working Paper 2006-46 Sharon Kozicki, P. A. Tinsley

  Surveys provide direct information on expectations, but only short histories are available at quarterly frequencies or for long-horizon expectations.

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

• ToTEM: The Bank of Canada's New Quarterly Projection Model

  Technical Report No. 97 Stephen Murchison, Andrew Rennison

  The authors provide a detailed technical description of the Terms-of-Trade Economic Model (ToTEM), which replaced the Quarterly Projection Model (QPM) in December 2005 as the Bank's principal projection and policy-analysis model for the Canadian economy.

  Content Type(s): Staff research, Technical reports Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): E, E1, E17, E2, E20, E3, E30, E4, E40, E5, E50, F, F4, F41

• An Optimized Monetary Policy Rule for ToTEM

  Staff Working Paper 2006-41 Jean-Philippe Cayen, Amy Corbett, Patrick Perrier

  The authors propose a monetary policy rule for the Terms-of-Trade Economic Model (ToTEM), the Bank of Canada's new projection and policy-analysis model for the Canadian economy.

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

• 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