August 20, 2002
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2358
result(s)
August 19, 2002
Models in Policy-Making
This article examines another strategy in the Bank's approach to dealing with an uncertain world: the use of carefully articulated models to produce economic forecasts and to examine the implications of the various risks to those forecasts. Economic models are deliberate simplifications of a complex world that allow economists to make predictions that are reasonably accurate and that can be easily understood and communicated. By using several models, based on competing paradigms, the Bank minimizes policy errors that could result from relying on one view of the world and one philosophy of model design. The authors review some of the models currently used at the Bank, as well as the role of judgment in the projection process.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Economic models
August 18, 2002
The Role of Simple Rules in the Conduct of Canadian Monetary Policy
The third strategy employed by the Bank when dealing with uncertainty is the consideration of appropriate simple reaction functions or "rules" for the setting of the policy interest rate. Since John Taylor's presentation of his much-discussed rule, research on simple policy rules has exploded. Simple rules have several advantages. In particular, they are easy to construct and communicate and are believed by some to be robust, in the sense of generating good results in a variety of economic models. This article provides an overview of the recent research regarding the usefulness and robustness of simple monetary policy rules, particularly in models of the Canadian economy. It also describes and explains the role of simple rules in the conduct of monetary policy in Canada.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Monetary policy and uncertainty
The Usefulness of Consumer Confidence Indexes in the United States
Staff Working Paper 2002-22
Brigitte Desroches,
Marc-André Gosselin
This paper assesses the usefulness of consumer confidence indexes in forecasting aggregate consumer spending in the United States.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Domestic demand and components,
Economic models,
International topics
JEL Code(s):
D,
D1,
D12,
E,
E2,
E21,
E27
Entrepreneurial Risk, Credit Constraints, and the Corporate Income Tax: A Quantitative Exploration
Staff Working Paper 2002-21
Césaire Meh
This paper describes the positive effect that corporate income tax has on capital formation in the presence of liquidity constraints and uninsurable risk.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Fiscal policy
JEL Code(s):
D,
D3,
D31,
E,
E6,
E62,
H,
H2,
H20,
H23
Evaluating the Quarterly Projection Model: A Preliminary Investigation
Staff Working Paper 2002-20
Robert Amano,
Kim McPhail,
Hope Pioro,
Andrew Rennison
This paper summarizes the results of recent research evaluating the Bank of Canada's Quarterly Projection Model (QPM).
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models
JEL Code(s):
C,
C5,
C52,
E,
E1,
E17,
E3,
E30,
E37
The Financial Services Sector: An Update on Recent Developments
Technical Report No. 91
Charles Freedman,
Clyde Goodlet
The Canadian financial industry continues to experience significant changes. This report provides an update on recent developments and re-examines a number of issues facing financial service providers that were identified in Technical Report No. 82.
Content Type(s):
Staff research,
Technical reports
Topic(s):
Financial institutions,
Financial services
JEL Code(s):
G,
G2
Dollarization in Canada: The Buck Stops There
Technical Report No. 90
John Murray,
James Powell
The sharp depreciation of the Canadian dollar and the successful launch of the euro have spawned an animated debate in Canada concerning the potential benefits of formally adopting the U.S. dollar as our national currency.
Content Type(s):
Staff research,
Technical reports
Topic(s):
Exchange rate regimes
JEL Code(s):
E,
E3,
E32,
F,
F3,
F33,
F36
Estimates of the Sticky-Information Phillips Curve for the United States, Canada, and the United Kingdom
Staff Working Paper 2002-19
Hashmat Khan,
Zhenhua Zhu
Mankiw and Reis (2001a) have proposed a "sticky-information"-based Phillips curve (SIPC) to address some of the concerns with the "sticky-price"-based new Keynesian Phillips curve.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Inflation and prices
JEL Code(s):
E,
E3,
E31
Estimated DGE Models and Forecasting Accuracy: A Preliminary Investigation with Canadian Data
Staff Working Paper 2002-18
Kevin Moran,
Veronika Dolar
This paper applies the hybrid dynamic general-equilibrium, vector autoregressive (DGE-VAR) model developed by Ireland (1999) to Canadian time series.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models
JEL Code(s):
E,
E3,
E32,
E37