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Assessing Indexation-Based Calvo Inflation Models

Staff Working Paper 2009-7 Jean-Marie Dufour, Lynda Khalaf, Maral Kichian
Using identification-robust methods, the authors estimate and evaluate for Canada and the United States various classes of inflation equations based on generalized structural Calvo-type models. The models allow for different forms of frictions and vary in their assumptions regarding the type of price indexation adopted by firms.

Are Commodity Prices Useful Leading Indicators of Inflation?

Staff Discussion Paper 2009-5 Calista Cheung
Commodity prices have increased dramatically and persistently over the past several years, followed by a sharp reversal in recent months. These large and persistent movements in commodity prices raise questions about their implications for global inflation. The process of globalization has motivated much debate over whether global factors have become more important in driving the […]

Relative Prices, Trading Gains, and Real GDI: The Case of Canada

Staff Discussion Paper 2009-4 Yi Zheng
Treating imports as intermediate inputs to domestic production, the author adopts the translog function approach to model real gross domestic income (GDI) in Canada over the 1961–2006 period. She explores the role of price ratios, such as terms of trade and the real effective exchange rate, in explaining changes in real GDI, trade openness, trade […]

Emerging Asia's Impact on Food and Oil Prices: A Model-Based Analysis

Staff Discussion Paper 2009-3 René Lalonde, Philipp Maier, Dirk Muir
The authors explore the usefulness of macroeconomic models in analyzing global economic developments by examining movements in commodity prices between July 2007 and July 2008. They use the Bank of Canada's version of the Global Economy Model and investigate the longer-term outlook for commodity prices by constructing two different, globally consistent, scenarios for emerging Asia.

Labour Shares and the Role of Capital and Labour Market Imperfections

Staff Discussion Paper 2009-2 Lena Suchanek
In continental Europe, labour shares in national income have exhibited considerable variation since 1970. Empirical and theoretical research suggests that the evolution of labour markets and labour market imperfections can, in part, explain this phenomenon.

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.

Inventories, Markups, and Real Rigidities in Menu Cost Models

Staff Working Paper 2009-6 Oleksiy Kryvtsov, Virgiliu Midrigan
Real rigidities that limit the responsiveness of real marginal cost to output are a key ingredient of sticky price models necessary to account for the dynamics of output and inflation. We argue here, in the spirit of Bils and Kahn (2000), that the behavior of marginal cost over the cycle is directly related to that of inventories, data on which is readily available.

Comparison of Auction Formats in Canadian Government Auctions

Staff Working Paper 2009-5 Olivier Armantier, Nourredine Lafhel
Using a rich sample of Canadian government securities auctions, we estimate the structural parameters of a share-auction model accounting for asymmetries across bidders. We find little evidence of asymmetries between participants at Canadian government nominal bond auctions.

What Accounts for the U.S.-Canada Education-Premium Difference?

Staff Working Paper 2009-4 Oleksiy Kryvtsov, Alexander Ueberfeldt
This paper analyzes the differences in wage ratios of university graduates to less than university graduates, the education premium, in Canada and the United States from 1980 to 2000. Both countries experienced a similar increase in the fraction of university graduates and a similar increase in skill biased technological change based on capital-embodied technological progress, but only the United States had a large increase in the education premium.
Content Type(s): Staff research, Staff working papers Topic(s): Labour markets, Productivity JEL Code(s): E, E2, E24, E25, J, J2, J24, J3, J31
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