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198
result(s)
Inflation Dynamics and the New Keynesian Phillips Curve: An Identification-Robust Econometric Analysis
Staff Working Paper 2005-27
Jean-Marie Dufour,
Lynda Khalaf,
Maral Kichian
The authors use identification-robust methods to assess the empirical adequacy of a New Keynesian Phillips curve (NKPC) equation.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Inflation and prices
JEL Code(s):
C,
C1,
C13,
C5,
C52,
E,
E3,
E31
Endogenous Central Bank Credibility in a Small Forward-Looking Model of the U.S. Economy
Staff Working Paper 2005-16
René Lalonde
The linkages between inflation and the economy's cyclical position are thought to be strongly affected by the credibility of monetary authorities.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Inflation and prices,
Monetary policy transmission
JEL Code(s):
C,
C3,
C32,
E,
E5,
E52
State-Dependent or Time-Dependent Pricing: Does It Matter for Recent U.S. Inflation?
Staff Working Paper 2005-4
Peter J. Klenow,
Oleksiy Kryvtsov
Inflation equals the product of two terms: an extensive margin (the fraction of items with price changes) and an intensive margin (the average size of those changes).
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices
JEL Code(s):
E,
E3,
E31,
E32
December 23, 2004
A Survey of the Price-Setting Behaviour of Canadian Companies
To better understand price-setting behaviour in the Canadian economy, the Bank of Canada's regional offices surveyed a representative sample of 170 firms between July 2002 and March 2003. The authors discuss the reasons behind the survey, the methodology used to develop the questionnaire and conduct the interviews, and summarize the results. The study also assessed several explanations for holding prices steady despite market pressures for a change. The survey findings indicate that prices in Canada are relatively flexible and have become more flexible over the past decade. Price stickiness was generally found to originate in firms' fears of antagonizing customers or disturbing the goodwill or reputation developed with them. A detailed discussion of the results includes a consideration of their implications for monetary policy.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
Monetary policy transmission
November 23, 2004
Real Return Bonds: Monetary Policy Credibility and Short-Term Inflation Forecasting
The break-even inflation rate (BEIR) is calculated by comparing the yields on conventional and Real Return Bonds. Defined as the average rate of inflation that equates the expected returns on these two bonds, the BEIR has the potential to contain useful information about long-run inflation expectations. Yet the BEIR has been higher, on average, and more variable than survey measures of inflation expectations, which may be explained by the effects of premiums and distortions embedded in the BEIR. Because of the difficulty in accounting for these distortions, the BEIR should not be given a large weight as a measure of long-run inflation expectations at this time. However, as the Real Return Bond market continues to develop, the BEIR should become a more useful indicator of inflation expectations. At present, it demonstrates no clear advantage over survey measures and even past inflation rates in forecasting near-term inflation.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
Interest rates,
Market structure and pricing
Real Return Bonds, Inflation Expectations, and the Break-Even Inflation Rate
Staff Working Paper 2004-43
Ian Christensen,
Christopher Reid,
Frédéric Dion
According to the Fisher hypothesis, the gap between Canadian nominal and Real Return Bond yields (or break-even inflation rate) should be a good measure of inflation expectations.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Interest rates,
Market structure and pricing
JEL Code(s):
E,
E3,
E31,
E4,
E43
The U.S. New Keynesian Phillips Curve: An Empirical Assessment
Staff Working Paper 2004-35
Alain Guay,
Florian Pelgrin
The authors examine the evidence presented by Galí and Gertler (1999) and Galí, Gertler, and Lopez-Salido (2001, 2003) that the inflation dynamics in the United States can be well-described by the New Keynesian Phillips curve (NKPC).
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Inflation and prices
JEL Code(s):
C,
C1,
C13,
C5,
C52,
E,
E3,
E31
The New Keynesian Hybrid Phillips Curve: An Assessment of Competing Specifications for the United States
Staff Working Paper 2004-31
David Dupuis
Inflation forecasting is fundamental to monetary policy. In practice, however, economists are faced with competing goals: accuracy and theoretical consistency.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Inflation and prices
JEL Code(s):
E,
E3,
E31
Exchange Rate Pass-Through and the Inflation Environment in Industrialized Countries: An Empirical Investigation
Staff Working Paper 2004-21
Jeannine Bailliu,
Eiji Fujii
This paper investigates the question of whether a transition to a low-inflation environment, induced by a shift in monetary policy, results in a decline in the degree of pass-through of exchange rate movements to consumer prices.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Inflation and prices,
International topics
JEL Code(s):
E,
E3,
E31,
E4,
E42,
F,
F3,
F31