May 23, 2003
Find Bank of Canada research by keyword, author, content type, JEL code, topic or date of publication.
Receive notification by email whenever new research is added to the website.
2380
result(s)
May 22, 2003
Inflation Targeting and Medium-Term Planning: Some Simple Rules of Thumb
Inflation targeting, a stable macroeconomic environment, and an average growth rate for potential output that is not expected to vary much in the next several years all help households, businesses, and governments in their medium-term economic and financial planning. Several simple rules of thumb can be usefully employed in this planning. Specifically, inflation targeting has maintained most major measures of inflation quite close to the target midpoint on average over a number of years. Combined with a clear fiscal framework, this has contributed to a more stable macroeconomic environment in which output varies less around its potential level. Potential output growth is expected to average around 3 per cent over the next several years. In light of these factors and historical relationships, labour income, profits, and consumer spending will likely grow, on average, by about 5 per cent over the medium term. Real and nominal long-term interest rates should also continue to be stable, with real 30-year yields varying around 3.5 or 4.0 per cent, and nominal yields varying around 5.5 or 6.0 per cent.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Business fluctuations and cycles,
Inflation targets,
Inflation: costs and benefits
May 21, 2003
Conference Summary: Price Adjustment and Monetary Policy
The 2002 Bank of Canada Conference focused on price adjustment, a critically important issue for monetary policy. Given the acceptance throughout the 1990s and 2000s of the existence of price stickiness in goods or labour markets, or both, and of the important role that monetary policy can play in an economy, the time was right for a conference that would focus on current developments in this area of research, particularly within a Canadian context. Conference papers covering both theoretical and empirical studies explored such themes as sources of the persistence of inflation, forward-looking models of inflation, models of inflation in open economies, the macroeconomic effects of technology shocks, and models of the interaction between wages, prices, and real economic outcomes.
Content Type(s):
Publications,
Bank of Canada Review articles
May 20, 2003
Updating the Bank of Canada Commodity Price Index
The Bank of Canada Commodity Price Index (BCPI) summarizes the price movements of 23 commodities produced in Canada. Information provided by the BCPI is used in analyzing movements in GDP, industrial producer prices, inflation, and the exchange rate. Effective 15 May 2003, a number of changes will be reflected in the BCPI. To ensure that the index accurately reflects the natural resource sectors of the economy, a number of new components and pricing sources have been incorporated into the BCPI. Weights in the new index will be chained to 1 January 1991 and 1 January 2000 to better reflect contemporary values.
Content Type(s):
Publications,
Bank of Canada Review articles
Un modèle « PAC » d'analyse et de prévision des dépenses des ménages américains
Staff Working Paper 2003-13
Marc-André Gosselin,
René Lalonde
Traditional structural models cannot distinguish whether changes in activity are a function of altered expectations today or lagged responses to past plans. Polynomial-adjustment-cost (PAC) models remove this ambiguity by explicitly separating observed dynamic behaviour into movements that have been induced by changes in expectations, and responses to expectations, that have been delayed because of adjustment costs.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Econometric and statistical methods,
Economic models
JEL Code(s):
C,
C3,
C32,
E,
E2,
E21,
E3,
E32
The Macroeconomic Effects of Military Buildups in a New Neoclassical Synthesis Framework
Staff Working Paper 2003-12
Alain Paquet,
Louis Phaneuf,
Nooman Rebei
The authors study the macroeconomic consequences of large military buildups using a New Neoclassical Synthesis (NNS) approach that combines nominal rigidities within imperfectly competitive goods and labour markets. They show that the predictions of the NNS framework generally are consistent with the sign, timing, and magnitude of how hours worked, after-tax real wages, and output actually respond to an upsurge in military purchases.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models,
Fiscal policy
JEL Code(s):
E,
E3,
E32,
E6,
E62,
H,
H2
Collateral and Credit Supply
Staff Working Paper 2003-11
Joseph Atta-Mensah
The author examines the role of collateral in an environment where lenders and borrowers possess identical information and similar beliefs about its future value. Using option-pricing techniques, he shows that a secured loan contract is equivalent to a regular bond and an embedded option to the borrower to default.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Credit and credit aggregates,
Economic models
JEL Code(s):
E,
E5,
E51,
G,
G1,
G11,
G12,
G13
A Stochastic Simulation Framework for the Government of Canada's Debt Strategy
Staff Working Paper 2003-10
David Bolder
Debt strategy is defined as the manner in which a government finances an excess of government expenditures over revenues and any maturing debt issued in previous periods. The author gives a thorough qualitative description of the complexities of debt strategy analysis and then demonstrates that it is, in fact, a problem in stochastic optimal control.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Debt management,
Econometric and statistical methods,
Economic models
JEL Code(s):
C,
C0,
C1,
C15,
C5,
C52,
H,
H6,
H63
Bank Lending, Credit Shocks, and the Transmission of Canadian Monetary Policy
Staff Working Paper 2003-9
Joseph Atta-Mensah,
Ali Dib
The authors use a dynamic general-equilibrium model to study the role financial frictions play as a transmission mechanism of Canadian monetary policy, and to evaluate the real effects of exogenous credit shocks. Financial frictions, which are modelled as spreads between deposit and loan interest rates, are assumed to depend on economic activity as well as on credit shocks.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Monetary policy framework,
Monetary policy transmission
JEL Code(s):
E,
E3,
E32,
E4,
E5,
E51
A Comparison of Twelve Macroeconomic Models of the Canadian Economy
Technical Report No. 94
Denise Côté,
John Kuszczak,
Jean-Paul Lam,
Ying Liu,
Pierre St-Amant
In this report, the authors examine and compare twelve private and public sector models of the Canadian economy with respect to their paradigm, structure, and dynamic properties. These open-economy models can be grouped into two economic paradigms.
Content Type(s):
Staff research,
Technical reports
Topic(s):
Economic models,
Monetary policy and uncertainty
JEL Code(s):
C,
C5,
E,
E5,
E52,
E58