F4 - Macroeconomic Aspects of International Trade and Finance

• How Changes in Oil Prices Affect the Macroeconomy

  Staff Working Paper 2009-33 Brian DePratto, Carlos De Resende, Philipp Maier

  We estimate a New Keynesian general-equilibrium open economy model to examine how changes in oil prices affect the macroeconomy. Our model allows oil price changes to be transmitted through temporary demand and supply channels (affecting the output gap), as well as through persistent supply side effects (affecting trend growth).

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Interest rates, Monetary policy transmission, Potential output, Productivity JEL Code(s): F, F4, F41, Q, Q4, Q43

• Exchange Rate Pass-through and Monetary Policy: How Strong is the Link?

  Staff Working Paper 2009-29 Stephen Murchison

  Several authors have presented reduced-form evidence suggesting that the degree of exchange rate pass-through to the consumer price index has declined in Canada since the early 1980s and is currently close to zero.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Monetary policy transmission JEL Code(s): E, E5, E52, F, F3, F31, F4, F41

• Productivity, the Terms of Trade, and the Real Exchange Rate: The Balassa-Samuelson Hypothesis Revisited

  Staff Working Paper 2009-22 Ehsan U. Choudhri, Lawrence L. Schembri

  The paper examines how the Balassa-Samuelson hypothesis is affected by a modern variation of the standard model that allows product differentiation (within the traded and nontraded goods sectors) with the number of firms determined exogenously or endogenously.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Productivity JEL Code(s): F, F3, F31, F4, F41

• Canada and the IMF: Trailblazer or Prodigal Son?

  Staff Discussion Paper 2009-1 Michael Bordo, Lawrence L. Schembri, Tamara Gomes

  Canada played an important role in the postwar establishment of the International Monetary Fund (IMF), yet it was also the first major member to challenge the orthodoxy of the BrettonWoods par value system by abandoning it in 1950 in favour of a floating, market-determined exchange rate.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Exchange rate regimes, Exchange rates, Monetary policy framework JEL Code(s): E, E5, E52, E58, F, F4, F41, F5, F55, N, N7, N72

• Import Price Dynamics in Major Advanced Economies and Heterogeneity in Exchange Rate Pass-Through

  Staff Working Paper 2008-39 Stephane Dees, Matthias Burgert, Nicolas Parent

  This paper aims at showing heterogeneity in the degree of exchange rate pass-through to import prices in major advanced economies at three different levels: 1) across destination markets; 2) across types of exporters (distinguishing developed economy from emerging economy exporters); and 3) over time.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Inflation and prices JEL Code(s): E, E3, E31, F, F3, F4, F41

• Do Central Banks Respond to Exchange Rate Movements? Some New Evidence from Structural Estimation

  Staff Working Paper 2008-24 Wei Dong

  This paper investigates the impact of exchange rate movements on the conduct of monetary policy in Australia, Canada, New Zealand and the United Kingdom. We develop and estimate a structural general equilibrium two-sector model with sticky prices and wages and limited exchange rate pass-through.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, International topics, Monetary policy framework JEL Code(s): F, F3, F4

• A Model of Housing Boom and Bust in a Small Open Economy

  Staff Working Paper 2008-9 Hajime Tomura

  This paper considers a dynamic stochastic general equilibrium model for a small open economy and finds that an improvement in the terms of trade causes a housing boom-bust cycle if the duration of the improvement is uncertain.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates JEL Code(s): E, E4, E44, F, F4, F41

• Welfare Effects of Commodity Price and Exchange Rate Volatilities in a Multi-Sector Small Open Economy Model

  Staff Working Paper 2008-8 Ali Dib

  This paper develops a multi-sector New Keynesian model of a small open economy that includes commodity, manufacturing, non-tradable, and import sectors. Price and wage rigidities are sector specific, modelled à la Calvo-Yun style contracts.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Exchange rate regimes, International topics JEL Code(s): E, E4, E5, E52, F, F3, F4

• Markups in Canada: Have They Changed and Why?

  Staff Working Paper 2008-7 Danny Leung

  Many empirical studies have examined the cyclical nature of the markup ratio. Until recently, few have attempted to ascertain the changes in the markup over a longer time horizon.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods JEL Code(s): E, E3, E31, F, F4, F41, L, L1, L11

• A Wave of Protectionism? An Analysis of Economic and Political Considerations

  Staff Working Paper 2008-2 Philipp Maier

  In light of the U.S. current account deficit, pressure is high on Asian countries to revalue their currencies. The calls from some U.S. policymakers for tariffs on imports from China has sparked fears that this could trigger a world-wide surge in protectionism.

  Content Type(s): Staff research, Staff working papers Topic(s): International topics, Recent economic and financial developments, Regional economic developments JEL Code(s): E, E6, E66, F, F3, F32, F4, F47