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282
result(s)
The Welfare Implications of Fiscal Dominance
Staff Working Paper 2008-28
Carlos De Resende,
Nooman Rebei
This paper studies the interdependence between fiscal and monetary policy in a DSGE model with sticky prices and non-zero trend inflation. We characterize the fiscal and monetary policies by a rule whereby a given fraction k of the government debt must be backed by the discounted value of current and future primary surpluses.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Fiscal policy,
Inflation: costs and benefits,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E4,
E42,
E5,
E50,
E6,
E63
Price-Level versus Inflation Targeting with Financial Market Imperfections
Staff Working Paper 2008-26
Francisco Covas,
Yahong Zhang
This paper compares price-level-path targeting (PT) with inflation targeting (IT) in a sticky-price, dynamic, general equilibrium model augmented with imperfections in both the debt and equity markets.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Inflation targets,
Monetary policy framework
JEL Code(s):
E,
E4,
E40,
E5,
E50
A Structural VAR Approach to Core Inflation in Canada
Staff Discussion Paper 2008-10
Sylvain Martel
The author constructs a measure of core inflation using a structural vector autoregression containing oil-price growth, output growth, and inflation. This "macro-founded" measure of inflation forecasts total inflation at least as well as other, atheoretical measures.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Inflation and prices
JEL Code(s):
C,
C5,
C53,
E,
E3,
E31
Inflation, Nominal Portfolios, and Wealth Redistribution in Canada
Staff Working Paper 2008-19
Césaire Meh,
Yaz Terajima
There is currently a policy debate on potential refinements to monetary policy regimes in countries with low and stable inflation such as the U.S. and Canada. For example, in Canada, a systematic review of the current inflation targeting framework is underway.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Inflation targets,
Inflation: costs and benefits,
Monetary policy framework,
Sectoral balance sheet
JEL Code(s):
D,
D3,
D31,
D5,
D58,
E,
E3,
E31,
E5,
E50
Uncertainty, Inflation, and Welfare
Staff Working Paper 2008-13
Jonathan Chiu,
Miguel Molico
This paper studies the welfare costs and the redistributive effects of inflation in the presence of idiosyncratic liquidity risk, in a micro-founded search-theoretical monetary model. We calibrate the model to match the empirical aggregate money demand and the distribution of money holdings across households, and study the effects of inflation under the implied degree of market incompleteness.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation: costs and benefits,
Monetary policy framework
JEL Code(s):
E,
E4,
E40,
E5,
E50
Inflation Targeting and Price-Level-Path Targeting in the GEM: Some Open Economy Considerations
Staff Working Paper 2008-6
Donald Coletti,
René Lalonde,
Dirk Muir
This paper compares the performance of simple inflation targeting (IT) and price-level path targeting (PLPT) rules to stabilize the macroeconomy, in response to a series of shocks, similar to those seen in Canada and the United States over the 1983 to 2004 period.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Inflation and prices,
Inflation: costs and benefits,
Monetary policy framework
JEL Code(s):
C,
C5,
C51,
C52,
E,
E1,
E17,
E3,
E31,
E5,
E52
December 14, 2007
The Costs of Inflation in New Keynesian Models
Ambler describes three new channels through which inflation affects economic welfare in New Keynesian models. These channels were absent from traditional analyses and may have caused researchers to underestimate the costs associated with variable inflation, even at relatively low levels of inflation. The article concludes with a preliminary assessment of the quantitative importance of the new channels and their significance for monetary policy.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation: costs and benefits,
Monetary policy framework
December 13, 2007
Central Bank Performance under Inflation Targeting
Gosselin examines and reports on the various factors that contribute to successful inflation targeting. Using a panel of 21 inflation-targeting countries over the period 1990Q1-2007Q2, Gosselin finds that the ability of central banks to hit their targets varies considerably. Some of these differences can be explained by exchange rate fluctuations, fiscal deficits, and differences in financial development. Others are explained by differences in the targeting framework itself and the manner in which it is implemented.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Central bank research,
Inflation targets,
Monetary policy framework
December 11, 2007
The Zero Bound on Nominal Interest Rates: Implications for Monetary Policy
One of the most important factors that must be considered if countries are thinking about lowering the target level of inflation much below 2 per cent is the zero interest bound. Targeting inflation rates that are too low, the authors note, may restrict the ability of monetary policy to respond to economic shocks by limiting the amount by which interest rates can be eased.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation: costs and benefits,
Interest rates,
Monetary policy implementation