June 21, 2006
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786
result(s)
June 16, 2006
Global Imbalances—Just How Dangerous?
The combination of rising current account surpluses in Asia and a growing current account deficit in the United States has raised concerns that the resulting imbalances pose a threat to the world economy, especially if they are reversed in a disorderly manner. Some experts believe that normal market forces will resolve these imbalances over time; others argue that policy-makers should facilitate the adjustment with policies that curb domestic demand in deficit countries and stimulate it in surplus countries. Little and Lafrance provide a guide to the major issues and controversies involved in the debate.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Balance of payments and components,
Exchange rates,
International topics
June 11, 2006
Evaluating Measures of Core Inflation
Since the Bank of Canada adopted inflation targeting in 1991, it has focused on a measure of core inflation as a shorter-term guide for monetary policy. When the targets were renewed in 2001, the Bank adopted CPIX as its measure of core inflation because of the advantages it offered. Leflèche and Armour review the experience with CPIX and whether the criteria used to select it in 2001 still favour the measure today. They describe the various measures of core inflation monitored by the Bank and evaluate them on the basis of the volatility of the components, the volatility of the core measures themselves, absence of bias relative to total CPI, predictive power, and certain practical criteria, including timeliness and credibility. They conclude that CPIX still satisfies all the empirical and practical criteria.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
Inflation targets,
Monetary policy framework
Launching the NEUQ: The New European Union Quarterly Model, A Small Model of the Euro Area and U.K. Economies
Staff Working Paper 2006-22
Anna Piretti,
Charles St-Arnaud
The authors develop a projection model of the euro area and the United Kingdom. The model consists of two country blocks, endogenous to each other via the foreign demand channel.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models
JEL Code(s):
C,
C5,
C53,
E,
E1,
E17,
E3,
E37
April 15, 2006
Issues in Inflation Targeting: A Summary of the Bank of Canada Conference Held 28-29 April 2005
The Bank of Canada's 2005 conference focused on two critical issues: price-level targets versus inflation targets, and the appropriate level of inflation. Session topics included new methodological approaches to examining the validity of the New Keynesian Phillips curve for Canada; the monetary policy implications of border effects and the financial-accelerator model; the zero lower bound on nominal interest rates; and inflation and welfare in general-equilibrium macroeconomic models. A panel of invited speakers discussed the issues of each session, and two distinguished speakers gave their perspectives on inflation.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
Inflation targets,
Monetary policy framework
Forecasting Commodity Prices: GARCH, Jumps, and Mean Reversion
Staff Working Paper 2006-14
Jean-Thomas Bernard,
Lynda Khalaf,
Maral Kichian,
Sebastien McMahon
Fluctuations in the prices of various natural resource products are of concern in both policy and business circles; hence, it is important to develop accurate price forecasts.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods
JEL Code(s):
C,
C5,
C52,
C53,
E,
E3,
E37
Guarding Against Large Policy Errors under Model Uncertainty
Staff Working Paper 2006-13
Gino Cateau
How can policy-makers avoid large policy errors when they are uncertain about the true model of the economy?
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Monetary policy and uncertainty
JEL Code(s):
D,
D8,
D81,
E,
E5,
E58
The Federal Reserve's Dual Mandate: A Time-Varying Monetary Policy Priority Index for the United States
Staff Working Paper 2006-11
René Lalonde,
Nicolas Parent
In the United States, the Federal Reserve has a dual mandate of promoting stable inflation and maximum employment. Since the Fed directly controls only one instrument - the federal funds rate - the authors argue that the Fed's priorities continuously alternate between inflation and economic activity.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Monetary policy framework,
Monetary policy implementation
JEL Code(s):
C,
C2,
C22,
C5,
C52,
E,
E5,
E52
An Evaluation of Core Inflation Measures
Staff Working Paper 2006-10
Jamie Armour
The author provides a statistical evaluation of various measures of core inflation for Canada.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices
JEL Code(s):
E,
E3,
E31
Structural Change in Covariance and Exchange Rate Pass-Through: The Case of Canada
Staff Working Paper 2006-2
Lynda Khalaf,
Maral Kichian
The authors address empirically the implications of structural breaks in the variance-covariance matrix of inflation and import prices for changes in pass-through.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods
JEL Code(s):
C,
C5,
C52,
E,
E3,
E31,
F,
F3,
F31,
F4,
F40