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Conference held 20 and 21 November 2009 (papers in unedited, electronic format only)

A well-functioning international monetary system is required to promote economic growth and prosperity, Governor Carney said, as he reviewed the evolution of the international monetary system.

In response to the worst financial crisis since the 1930s, policy-makers around the globe are providing unprecedented stimulus to support economic recovery and are pursuing a radical set of reforms to build a more resilient financial system.

This paper uses a small-open economy model for the Canadian economy to examine the optimal Taylor-type monetary policy rule that stabilizes output and inflation in an environment where endogenous boom-bust cycles in house prices can occur.

A sequential Monte Carlo method for estimating GARCH models subject to an unknown number of structural breaks is proposed. Particle filtering techniques allow for fast and efficient updates of posterior quantities and forecasts in real time.

The Bank of Canada announced today that Deputy Governor David Longworth will retire on 31 March 2010.

Conference Proceedings held 12 and 13 November 2009 (papers in unedited, electronic format only)

The persistence of both core and total consumer price index inflation in Canada has declined significantly since the 1980s. In addition to providing up-to-date estimates of inflation persistence, this article examines possible reasons for the decline suggested in the literature. The role played by monetary policy, through its effect on price- and wage-setting behaviour, is distinguished from possible changes to the structure of the economy that are independent of monetary policy. The authors also discuss the implications for monetary policy of low structural persistence in inflation, including the choice of an inflation-targeting regime versus a price-level-targeting regime.

Many emerging-market economies (EMEs) have significantly improved their macroeconomic fundamentals and undergone structural reforms since the Asian crisis. These developments have enhanced the composition of capital flows to EMEs through an improved debt structure, a larger share of capital flows as foreign direct investment, and greater access to international debt markets for corporations in EMEs. Structural changes in the global financial landscape have also increased capital flows, bringing economic and financial benefits to EMEs. During the recent financial crisis, however, the opening up of capital accounts and increased financial and trade linkages left many countries vulnerable to external disruptions. Countries with sound fundamentals have weathered the crisis relatively well. Policy-makers in EMEs need to implement policies that support capital flows and ensure that controls imposed to deal with detrimental outflows during periods of stress or rapid inflows are only temporary.

The ability to conduct financial transactions using bank notes is crucial to independent living. Yet this can pose significant challenges for individuals who are blind or partially sighted. This article discusses the Bank of Canada's efforts over the past 30 years to meet the accessibility needs of a specific subset of the population–Canadians living with blindness or vision loss. It also reports the findings of expert and user assessments of the suite of accessibility features on the current series of bank notes and shares plans for the next series.