November 17, 2001 Predictability of Average Inflation over Long Time Horizons Bank of Canada Review - Autumn 2001 Allan Crawford Uncertainty about the level of future inflation adversely affects the economy because it distorts the savings and investment decisions of households and businesses. Since these decisions typically involve planning horizons of many years, the adverse effects from inflation uncertainty can be reduced by adopting a policy framework that makes future inflation more predictable over long time horizons. When the inflation-control target was renewed in May 2001, the agreement affirmed that monetary policy will be directed at moving inflation to the 2 per cent midpoint of the target range over a six-to-eight-quarter horizon. The author describes how this policy commitment increases the predictability of average inflation over periods longer than one year. This relationship is illustrated using the Canadian experience from the inflation-targeting period. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation targets
November 16, 2001 Factors Affecting Regional Economic Performance in Canada Bank of Canada Review - Autumn 2001 Brigid Brady, Farid Novin This article examines three shocks that affected Canada's economy over the past year from a regional perspective. The downturn in the U.S. economy, high energy prices, and low lumber prices affected Canada's regions to varying degrees. The relative size of the various economic sectors in each region is important in determining the intensity of a region's response to an economic shock. The article presents some stylized facts on the sectoral mix of each region followed by an analysis of the effects of the three shocks on the regional economies. An outlook is presented, which highlights the results of the survey by the Bank's regional offices in the summer of 2001. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Regional economic developments
November 15, 2001 Conference Summary: Revisiting the Case for Flexible Exchange Rates Bank of Canada Review - Autumn 2001 Lawrence L. Schembri This article summarizes the proceedings of an international research conference hosted by the Bank of Canada in November 2000. The conference marked the fiftieth anniversary of Canada's adoption of a flexible exchange rate, and its title recognizes the seminal contribution of Professor Milton Friedman's article "The Case for Flexible Exchange Rates." His keynote address to the conference is also summarized in the article. The conference papers re-examine many of the arguments raised by Friedman using recent developments in economic theory and econometric techniques. They investigate the experience of a wide range of industrialized and emerging-market economies. The main findings are that a strong case can be made for flexible exchange rates in economies that are large commodity exporters and that have credible low-inflation monetary policies and relatively well-developed financial systems. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Exchange rate regimes, Exchange rates
November 7, 2001 Bank of Canada releases semi-annual Monetary Policy Report Media Relations The Bank of Canada today released its semi-annual Monetary Policy Report in which it discusses economic and financial trends in the context of Canada's inflation-control strategy. Content Type(s): Press, Press releases
November 7, 2001 Monetary Policy Report – November 2001 Two major issues dominate the analysis and policy discussion in this Monetary Policy Report: the nature and extent of the global economic slowdown that began late last year and the consequences of the terrorist attacks in the United States. Content Type(s): Publications, Monetary Policy Report
November 7, 2001 Release of the Monetary Policy Report Opening statement David Dodge Since our May 2001 Report, a further weakening of the world economy and the terrorist acts in the United States have forced a reappraisal of global economic prospects. By midsummer, evidence began to accumulate that the economic slowdown, globally and in Canada, would bedeeper and more protracted than previously anticipated. Thus, in late August, the […] Content Type(s): Press, Speeches and appearances, Opening statements
November 7, 2001 Opening Statement before the House of Commons Standing Committee on Finance Opening statement David Dodge House of Commons Standing Committee on Finance Right now, all national economies face difficulties - difficulties stemming from the further weakening of the world economy and from the terrorist acts in the United States. As businesses, governments, and individuals in Canada - and around the world - strive to come to terms with the implications of those acts, the main preoccupation is, naturally, with the near term. Content Type(s): Press, Speeches and appearances, Opening statements
November 1, 2001 Financial Market Structure and Dynamics Proceedings of a conference held by the Bank of Canada, November 2001 (proceedings volume, available in electronic format only) Content Type(s): Conferences and workshops
The Resolution of International Financial Crises: Private Finance and Public Funds Staff Working Paper 2001-20 Andy Haldane, Mark Kruger Over the past year and a half, the Bank of England and the Bank of Canada have been developing a framework for the resolution of international financial crises that aligns incentives for all parties to deal with a crisis and preserve the integrity of the international financial system. The framework is built on principles, not rules. Content Type(s): Staff research, Staff working papers Topic(s): International topics JEL Code(s): F, F3, F34, F4, F42
Employment Effects of Restructuring in the Public Sector in North America Staff Working Paper 2001-19 Paul Fenton, Irene Ip, Geoff Wright This paper examines whether restructuring in the public sector contributed to the slower cyclical recovery in Canada than in the United States during the 1990s. Changes in public sector employment are used to investigate this question. Content Type(s): Staff research, Staff working papers Topic(s): Labour markets JEL Code(s): J, J4, J45