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86
result(s)
Communicating Inflation Uncertainty and Household Expectations
Staff Working Paper 2023-63
Olena Kostyshyna,
Luba Petersen
We examine the value of direct communication to households about inflation and the uncertainty around inflation statistics. All types of information about inflation are effective at immediately managing inflation expectations, with information about outlooks being more effective and relevant than that about recent inflation and Bank targets.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Credibility,
Inflation and prices,
Inflation targets,
Monetary policy and uncertainty,
Monetary policy communications
JEL Code(s):
C,
C9,
C93,
D,
D8,
D84,
E,
E5,
E59,
E7
Monetary Policy Transmission, Bank Market Power, and Wholesale Funding Reliance
Staff Working Paper 2023-35
Amina Enkhbold
I study how banking market concentration and reliance on wholesale funding affect monetary policy transmission to mortgage rates. I find that this transmission is imperfect and dampens the response of consumption, output, and housing prices.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Inflation targets,
Monetary policy transmission,
Wholesale funding
JEL Code(s):
E,
E4,
E44,
E5,
E52,
G,
G2,
G21
The 2021–22 Surge in Inflation
Staff Discussion Paper 2023-3
Oleksiy Kryvtsov,
James (Jim) C. MacGee,
Luis Uzeda
The rise in inflation in 2021–22 sparked a growing literature and debate over the causes of the surge as well as the near- and medium-term path for inflation. This review offers three key messages.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Inflation and prices,
Inflation targets,
Monetary policy
JEL Code(s):
E,
E3,
E31,
E5,
E52,
E58
Gazing at r-star: A Hysteresis Perspective
Staff Working Paper 2023-5
Paul Beaudry,
Katya Kartashova,
Césaire Meh
Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to show that the major change driving household asset demand over this period is instead an increased desire—for a given age and income level—to hold assets.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Fiscal policy,
Inflation and prices,
Inflation targets,
Interest rates,
Monetary policy,
Monetary policy framework
JEL Code(s):
E,
E2,
E21,
E3,
E31,
E4,
E43,
E5,
E52,
E58,
E6,
E62,
G,
G5,
G51,
H,
H6
A Horse Race of Monetary Policy Regimes: An Experimental Investigation
Staff Working Paper 2022-33
Olena Kostyshyna,
Luba Petersen,
Jing Yang
How should central banks design monetary policy in stable times and during recessions? We run a horse race between five monetary policy frameworks in an experimental laboratory to assess how well the different approaches can manage the public’s expectations and stabilize the economy.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Monetary policy,
Monetary policy communications,
Monetary policy framework
JEL Code(s):
C,
C9,
D,
D8,
D84,
E,
E5,
E52,
E58
On the Wedge Between the PPI and CPI Inflation Indicators
Staff Working Paper 2022-5
Shang-Jin Wei,
Yinxi Xie
We find that the CPI and PPI inflation indexes co-moved strongly throughout the late 20th century, but their correlation has fallen substantially since the early 2000s. We offer a structural explanation for this divergence based on the growth of global supply chains since 2000. This finding offers a unique perspective for the future design of optimal monetary policy.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Inflation targets,
International topics,
Monetary policy
JEL Code(s):
E,
E3,
E31,
E5,
E52,
E58,
F,
F1,
F11,
F12,
F4,
F41,
F6,
F62
What to Target? Insights from a Lab Experiment
Staff Working Paper 2021-53
Isabelle Salle
In a laboratory experiment, we ask participants to predict inflation using three different policy regimes: inflation targeting—with and without greater communication of the target—average inflation targeting and price level targeting. We use participants’ predictions to compare the level and stability of inflation under each regime.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Monetary policy communications,
Monetary policy framework
JEL Code(s):
C,
C9,
C92,
E,
E3,
E31,
E5,
E52,
E7
The Bank of Canada’s “Horse Race” of Alternative Monetary Policy Frameworks: Some Interim Results from Model Simulations
Staff Discussion Paper 2021-13
José Dorich,
Rhys R. Mendes,
Yang Zhang
Bank of Canada staff are running a “horse race” of alternative monetary policy frameworks in the lead-up to 2021 renewal of the Bank’s monetary policy framework. This paper summarizes some interim results of model simulations from their research.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Central bank research,
Economic models,
Inflation targets,
Monetary policy,
Monetary policy framework,
Monetary policy transmission
JEL Code(s):
E,
E2,
E27,
E3,
E4,
E5,
E52,
E58
Exploring the potential benefits of inflation overshooting
Staff Analytical Note 2021-16
Robert Amano,
Marc-André Gosselin,
Kurt See
After a period with the interest rate at the effective lower bound, temporarily overshooting inflation may offer important economic benefits. This may be especially true for vulnerable segments of the population, such as workers with low attachment to the labour force and the long-term unemployed.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Inflation targets,
Labour markets,
Monetary policy,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E5,
E52,
J,
J2,
J20