February 20, 2002
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February 20, 2002
Canada's Experience with Inflation Targets and a Flexible Exchange Rate: Lessons Learned
The Canadian economy has undergone a dramatic transformation over the past decade. And it has emerged as a low-inflation economy, with declining levels of public and foreign debt and a private sector that is more cost-conscious, productive, and efficient, thanks to restructuring and investments in new technology. -
Currency Fluctuations, Liability Dollarization, and the Choice of Exchange Rate Regimes in Emerging Markets
Traditional models of exchange rate regimes ignore the destabilizing effects of sharp and unanticipated exchange rate movements. -
The Effects of Bank Consolidation on Risk Capital Allocation and Market Liquidity
This paper investigates the effects of financial market consolidation on risk capital allocation in a financial institution and the implications for market liquidity in dealership markets. We show that an increase in financial market consolidation can have ambiguous effects on liquidity in foreign exchange and government securities markets. -
Does Micro Evidence Support the Wage Phillips Curve in Canada?
The existing macroeconometric evidence lends support to the wage Phillips curve by showing a negative relation between the rate of change in wages and the unemployment rate, conditional on lagged price inflation. Most theoretical models of wage setting, however, generate a "wage curve," described by a negative relation between the level of the real wage and unemployment. -
January 31, 2002
Bank of Canada's outlook for the Canadian economy
The immediate impact and the fallout from last September's events introduced new layers of uncertainty into the economic picture, compounding the effects of a deepening global economic slowdown that had become more evident during the summer. -
January 29, 2002
Bank of Canada Governor reviews success of inflation targets
In a speech to the Saskatoon and District Chamber of Commerce, Bank of Canada Governor David Dodge said today that Canada's inflation-targeting system has led to many benefits for the Canadian economy. The Governor detailed those benefits, which were confirmed when the Bank and the Government of Canada renewed their inflation-control agreement last year. -
January 29, 2002
Inflation Targeting During a Difficult Year
One of the main benefits of the targets is that they help the economy to run more smoothly when there are surprises in the level of demand for Canadian goods and services. -
January 28, 2002
Bank of Canada Governor reviews key developments of last year
The Governor highlighted the global slowdown as the major economic challenge of the past year. But he said that there were also key changes within the Bank of Canada related to the implementation of monetary policy. In particular, he spoke of the success of the Bank's new system of eight fixed dates per year for announcing interest rate decisions. He also set out in detail the process that leads to those decisions. -
January 28, 2002
Challenges and Changes in an Eventful Year
The main economic concern of the past year was the slowdown that occurred not just here in Canada, but in most major economies. Compounding the economic concerns were the 11 September terrorist attacks in the United States.