December 14, 1998 Downward wage rigidity Bank of Canada Review - Winter 1998-1999 Allan Crawford, Seamus Hogan There has recently been considerable discussion about the ability of inflation to facilitate the adjustment of prices and wages and thus enhance economic performance. The discussion centres on whether wages are downwardly rigid. Wages are said to be downwardly rigid if it is difficult for the wages of some workers to fall despite underlying supply and demand pressures for decreases. Some authors have suggested that if downward nominal wage rigidity is prevalent it would be desirable to select a positive rate of inflation as the target for monetary policy. In this article, the authors evaluate the wage-rigidity hypothesis. They first examine the empirical evidence to assess whether the degree of downward rigidity is significant in Canada. They then analyze some key assumptions of the wage-rigidity hypothesis and its implications for employment. They also look at the empirical evidence on whether the combination of downward wage rigidity and low inflation has reduced employment. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation: costs and benefits
December 13, 1998 Survey of the Canadian foreign exchange and derivatives markets Bank of Canada Review - Winter 1998-1999 Robert Ogrodnick, Judy DiMillo In April 1998, the Bank of Canada conducted its triennial survey of activity in the Canadian foreign exchange and derivatives markets. This was part of a coordinated international effort in which 43 countries carried out similar surveys. The foreign exchange market in Canada is the 11th largest in the world, and the Canadian dollar is the 7th most-traded currency globally. The average daily turnover of traditional foreign exchange transactions has grown by 23 per cent (to US$37 billion) since the last survey in 1995. Although this growth was substantial, the rate of increase has declined steadily since the survey began in 1983. The average daily turnover for single-currency interest rate derivatives during April 1998 was US$6.4 billion, an increase of 48 per cent over the previous survey. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial markets
December 12, 1998 Conference summary: Information in financial asset prices Bank of Canada Review - Winter 1998-1999 Kevin Clinton, Mark Zelmer This article summarizes the proceedings of a conference hosted by the Bank of Canada in May 1998. This was the second Bank conference to focus directly on issues concerning financial markets. The topic for 1998—the extraction of information from the prices of financial assets—has been an area of extensive research by central banks worldwide because of its connection to monetary policy. The Bank wanted to encourage such work by Canadian researchers as well as solicit feedback on work conducted internally. It also wanted to broaden the understanding of the interplay in the markets between central banks and other participants. It therefore assembled a wide mix of researchers, central bankers, and market participants. The summary briefly outlines the papers presented as well as the wrap-up discussion. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial markets
December 7, 1998 The Canadian economy and monetary policy in unsettled times Remarks Gordon Thiessen Greater Victoria Chamber of Commerce Victoria, British Columbia When the Asian crisis erupted in the summer of 1997, few observers anticipated that international financial markets would still be under its influence more than a year later. Content Type(s): Press, Speeches and appearances, Remarks
December 7, 1998 Bank of Canada Governor Addresses Greater Victoria Chamber of Commerce Media Relations Victoria, British Columbia Bank of Canada Governor Gordon Thiessen today reviewed the impact of turmoil in the global economy and international financial markets on Canada's economy and monetary policy. Content Type(s): Press, Press releases
Une nouvelle méthode d'estimation de l'écart de production et son application aux États-Unis, au Canada et à l'Allemagne Staff Working Paper 1998-21 René Lalonde, Jennifer Page, Pierre St-Amant This study introduces a new method for identifying the output gap, based on the estimation of multivariate autoregression (VAR) models. This approach, which involves using restrictions to identify structural shocks that have only a transitory effect on output but that affect the trend inflation rate, is compared with the decomposition method proposed by Blanchard and […] Content Type(s): Staff research, Staff working papers
November 19, 1998 Pilot Repurchase Operation Call for Tenders Ron Morrow The following pilot repurchase operation will be conducted by the Bank of Canada on behalf of the Government of Canada, subject to the "Standard Terms for Repurchase Operations of Government of Canada Marketable Bonds." Content Type(s): Press, Press releases
November 19, 1998 Opening Statement before the Standing Senate Committee on Banking, Trade and Commerce Opening statement Gordon Thiessen Standing Senate Committee on Banking, Trade and Commerce Mr. Chairman, my colleagues and I always welcome our appearances before your committee. We released our latest Monetary Policy Report this past Monday. It covers a broad range of economic and monetary issues and provides an account of our policy actions and their results. The ultimate objective of Canadian monetary policy is to help create […] Content Type(s): Press, Speeches and appearances, Opening statements
November 18, 1998 Bank Rate Lowered by ¼ Percentage Point to 5¼ Per Cent Media Relations Ottawa, Ontario The Bank of Canada today lowered its Bank Rate by ¼ of one percentage point to 5¼ per cent. Content Type(s): Press, Press releases
November 17, 1998 Opening Statement before the House of Commons Standing Committee on Finance Opening statement Gordon Thiessen House of Commons Standing Committee on Finance Mr. Chairman, my colleagues and I welcome these appearances before your committee following each edition of the Bank of Canada’s Monetary Policy Report. As you know, we published our latest report yesterday. It touches on a wide range of economic and monetary issues and provides an opportunity for us to account for our policy actions […] Content Type(s): Press, Speeches and appearances, Opening statements