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198
result(s)
May 16, 2016
The Micro and Macro of Downward Nominal Wage Rigidity
The article examines the extent of downward nominal wage rigidity in Canada and its implications for monetary policy. The authors ask whether its existence is a sufficient argument for a higher inflation target if concerns about the effective lower bound are adequately addressed.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
Inflation targets,
Labour markets,
Monetary policy framework
JEL Code(s):
E,
E3,
E4,
E5,
J,
J2,
J23,
J3,
J30
A Bitcoin Standard: Lessons from the Gold Standard
Staff Working Paper 2016-14
Warren E. Weber
This paper imagines a world in which countries are on the Bitcoin standard, a monetary system in which all media of exchange are Bitcoin or are backed by it. The paper explores the similarities and differences between the Bitcoin standard and the gold standard and describes the media of exchange that would exist under the Bitcoin standard.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Digital currencies and fintech,
Exchange rates,
Financial services,
Inflation and prices
JEL Code(s):
E,
E4,
E41,
E42,
E5,
E58
Understanding Firms’ Inflation Expectations Using the Bank of Canada’s Business Outlook Survey
Staff Working Paper 2016-7
Simon Richards,
Matthieu Verstraete
Inflation expectations are a key determinant of actual and future inflation and thus matter for the conduct of monetary policy. We study how firms form their inflation expectations using quarterly firm-level data from the Bank of Canada’s Business Outlook Survey, spanning the 2001 to 2015 period.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Credibility,
Econometric and statistical methods,
Firm dynamics,
Inflation and prices,
Inflation targets,
Monetary policy framework
JEL Code(s):
C,
C1,
C2,
C25,
D,
D2,
D21,
D8,
D84,
E,
E3,
E31,
E5,
E52,
E58
November 19, 2015
A Survey of Consumer Expectations for Canada
The Bank of Canada recently launched a quarterly survey to measure the expectations of Canadian households: the Canadian Survey of Consumer Expectations (CSCE). The data collected provide comprehensive information about consumer expectations for and uncertainty about inflation, the labour market and household finance. This article describes the CSCE and illustrates its potential to offer rich information about Canadian consumers for researchers and policy-makers.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Central bank research,
Housing,
Inflation and prices,
Interest rates,
Labour markets,
Monetary policy and uncertainty
JEL Code(s):
D,
D1,
D12,
D8,
D84,
E,
E3,
E31,
E5,
E52,
J,
J0
November 19, 2015
Measuring Durable Goods and Housing Prices in the CPI: An Empirical Assessment
While the CPI is the most commonly used measure to track inflation, it is not fully consistent with a true cost-of-living index (COLI). Although the official treatment of durable goods and housing in the CPI represents an acceptable compromise in the current environment of low and stable inflation, Sabourin and Duguay suggest that it would be worthwhile to consider treating housing and durables in the same way and bringing the actual CPI closer to a COLI. This could be accomplished by employing an enhanced user-cost approach to calculate the imputed cost of the services provided by the use of durable goods or housing.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices
JEL Code(s):
E,
E3,
E31,
E5,
E52
A Comprehensive Evaluation of Measures of Core Inflation for Canada
Staff Discussion Paper 2015-12
Mikael Khan,
Louis Morel,
Patrick Sabourin
This paper evaluates the usefulness of various measures of core inflation for the conduct of monetary policy. Traditional exclusion-based measures of core inflation are found to perform relatively poorly across a range of evaluation criteria, in part due to their inability to filter unanticipated transitory shocks.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Inflation and prices,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E5,
E52
Exchange Rate Pass-Through to Consumer Prices: Theory and Recent Evidence
Staff Discussion Paper 2015-9
Laurence Savoie-Chabot,
Mikael Khan
In an open economy such as Canada’s, exchange rate movements can have a material impact on consumer prices. This is particularly important in the current context, with the significant depreciation of the Canadian dollar vis-a-vis the U.S. dollar since late 2012.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Exchange rates,
Inflation and prices
JEL Code(s):
E,
E3,
E31,
E5,
E52,
F,
F3,
F31
Exchange Rate Pass-Through, Currency of Invoicing and Market Share
Staff Working Paper 2015-31
Michael Devereux,
Wei Dong,
Ben Tomlin
This paper investigates the impact of market structure on the joint determination of exchange rate pass-through and currency of invoicing in international trade. A novel feature of the study is the focus on market share of firms on both sides of the market—that is, exporting firms and importing firms.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Inflation and prices,
Market structure and pricing
JEL Code(s):
F,
F3,
F4
May 14, 2015
Inflation Dynamics in the Post-Crisis Period
Inflation rates in advanced economies experienced two consecutive puzzles during the period following the global financial crisis—unexpectedly high inflation from the end of 2009 to 2011 and unexpectedly low inflation from 2012 to the middle of 2014. We investigate these developments in two ways. First, we show that accounting for inflation expectations by households explains a significant share of the inflation puzzles at the international level. Second, we find that, for Canada, elevated competition in the retail sector is also important for understanding inflation dynamics in the post-crisis period.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
International topics,
Regional economic developments
JEL Code(s):
E,
E3,
E31,
E5,
F,
F4,
F41