Staff research, Publications
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Inflation Targeting under Uncertainty
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. -
The Exchange Rate Regime and Canada's Monetary Order
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 […] -
An Intraday Analysis of the Effectiveness of Foreign Exchange Intervention
This paper assesses the effectiveness of Canada's official foreign exchange intervention in moderating intraday volatility of the Can$/US$ exchange rate, using a 2-1/2-year sample of 10-minute exchange rate data. The use of high frequency data (higher than daily frequency) should help in assessing the impact of intervention since the foreign exchange market is efficient and […] -
Yield Curve Modelling at the Bank of Canada
The primary objective of this paper is to produce a framework that could be used to construct a historical data base of zero-coupon and forward yield curves estimated from Government of Canada securities' prices. -
January 29, 1999
Annual Report 1998
Inflation remained low for the seventh consecutive year, and the inflation target range of 1 to 3 per cent was extended to 2001. -
Forecasting GDP Growth Using Artificial Neural Networks
Financial and monetary variables have long been known to contain useful leading information regarding economic activity. In this paper, the authors wish to determine whether the forecasting performance of such variables can be improved using neural network models. The main findings are that, at the 1-quarter forecasting horizon, neural networks yield no significant forecast improvements. […] -
January 15, 1999
Bank of Canada Review - Winter 1998-1999
Cover page
1858 Canadian pattern cent
The 1858 pattern cent is approximately the size of a twenty-five cent piece.
Photography by James Zagon.
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Capital Gains and Inflation Taxes in a Life-cycle Model
Inflation distorts an economy through many channels. This paper highlights the interaction between inflation and capital gains tax and how they distort an economy through the financial market. Several observations motivate this research. First, capital formation or investment is an important channel for economic agents to smooth their consumption over their life cycles. Second, capital […] -
Dynamic Employment and Hours Effects of Government Spending Shocks
In this paper, we analyze the dynamic behaviour of employment and hours worked per worker in a stochastic general equilibrium model with a matching mechanism between vacancies and unemployed workers. The model is estimated for the United States using the Generalized Methods of Moments (GMM) estimation technique. An increase in government spending raises hours worked […]