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282
result(s)
A Simple Test of Simple Rules: Can They Improve How Monetary Policy is Implemented with Inflation Targets?
Staff Working Paper 2003-31
Nicholas Rowe,
David Tulk
The authors evaluate whether an assortment of simple rules could improve how the Bank of Canada implements its inflation-targeting monetary policy. They focus on measuring the correlation between the deviations of inflation from the target and the lagged deviations of rule recommendations from the actual policy interest rate.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Monetary policy implementation
JEL Code(s):
E,
E5
Nominal Rigidities and Exchange Rate Pass-Through in a Structural Model of a Small Open Economy
Staff Working Paper 2003-29
Steve Ambler,
Ali Dib,
Nooman Rebei
The authors analyze exchange rate pass-through in an estimated structural model of a small open economy that incorporates three types of nominal rigidity (wages and the prices of domestically produced and imported goods) and eight different structural shocks. The model is estimated using quarterly data from Canada and the United States.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models,
Exchange rates,
Inflation and prices,
International topics
JEL Code(s):
F,
F2,
F3,
F31,
F33
Explaining and Forecasting Inflation in Emerging Markets: The Case of Mexico
Staff Working Paper 2003-17
Jeannine Bailliu,
Daniel Garcés,
Mark Kruger,
Miguel Messmacher
The authors apply existing inflation models that have worked well in industrialized countries to Mexico, an emerging market that has recently moved to adopt an inflation-targeting framework for monetary policy. They compare the performance of these models with a mark-up model that has been used extensively to analyze inflation in Mexico.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
International topics
JEL Code(s):
E,
E3,
E31,
E37
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
Inflation Changes, Yield Spreads, and Threshold Effects
Staff Working Paper 2002-40
Greg Tkacz
Using interest rate yield spreads to explain changes in inflation, we investigate whether such relationships can be modelled using two-regime threshold models.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Interest rates
JEL Code(s):
C,
C5,
C51,
E,
E3,
E31
An Empirical Analysis of Dynamic Interrelationships Among Inflation, Inflation Uncertainty, Relative Price Dispersion, and Output Growth
Staff Working Paper 2002-39
Francis Vitek
Within a unified framework, the author conducts an empirical investigation of dynamic interrelationships among inflation, inflation uncertainty, relative price dispersion, and output growth.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices
JEL Code(s):
E,
E3,
E31
Oil-Price Shocks and Retail Energy Prices in Canada
Staff Working Paper 2002-38
Marwan Chacra
The effects of global energy-price shocks on retail energy prices in Canada are examined. More specifically, the author looks at the response of the consumer price indexes for gasoline, heating oil, natural gas, and electricity in Canada to movements in world crude oil prices.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Inflation and prices,
Market structure and pricing
JEL Code(s):
C,
C2,
C22,
C5,
C51,
C53,
Q,
Q4,
Q40
How to Improve Inflation Targeting at the Bank of Canada
Staff Working Paper 2002-23
Nicholas Rowe
This paper shows that if the Bank of Canada is optimally adjusting its monetary policy instrument in response to inflation indicators to target 2 per cent inflation at a two-year horizon, then deviations of inflation from 2 per cent represent the Bank's forecast errors, and should be uncorrelated with its information set, which includes two-year lagged values of the instrument and the indicators. Positive or negative correlations are evidence of systematic errors in monetary policy.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Monetary and financial indicators,
Monetary policy implementation
JEL Code(s):
E,
E5
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