Non-linéarité de la courbe de Phillips : un survol de la littérature Staff analytical note 2018-3 Renaud St-Cyr The paper reviews evidence from the economic literature on the nature of the relationship between excess capacity and inflation, better known as the Phillips curve. In particular, we examine the linearity of this relationship. This is an important issue in the current economic context in which advanced economies are approaching or exceed their potential output. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E3, E31, E32 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
How Do Central Bank Projections and Forward Guidance Influence Private-Sector Forecasts? Staff working paper 2018-2 Monica Jain, Christopher S. Sutherland We construct a 23-country panel data set to consider the effect of central bank projections and forward guidance on private-sector forecast disagreement. We find that central bank projections and forward guidance matter mainly for private-sector forecast disagreement surrounding upcoming policy rate decisions and matter less for private-sector macroeconomic forecasts. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D8, D83, E, E3, E37, E5, E52, E58 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting
April 9, 2009 Next Steps for Canadian Monetary Policy Bank of Canada Review - Spring 2009 Robert Amano, Thomas J. Carter, Donald Coletti In 2006, the Bank initiated a research program exploring two alternatives to the current inflation-targeting framework: (i) lowering the inflation target and (ii) shifting to a price-level target. This article discusses progress to date, places the Bank's findings in the context of a broader literature, and identifies avenues for future research. Content Type(s): Publications, Bank of Canada Review articles
March 11, 1999 Then and now: the change in views on the role of monetary policy since the Porter Commission Lecture Gordon Thiessen C.D. Howe Institute Toronto, Ontario Tony Hampson made a number of outstanding contributions to Canadian public life as well as having a successful business career. Many in this audience will be familiar with the fact that for a number of years he was Chairman of the C.D. Howe Institute's Policy Analysis Committee. Content Type(s): Press, Speeches and appearances, Lectures
Order Flow Segmentation, Liquidity and Price Discovery: The Role of Latency Delays Staff working paper 2018-16 Michael Brolley, David Cimon Latency delays—known as “speed bumps”—are an intentional slowing of order flow by exchanges. Supporters contend that delays protect market makers from high-frequency arbitrage, while opponents warn that delays promote “quote fading” by market makers. We construct a model of informed trading in a fragmented market, where one market operates a conventional order book and the other imposes a latency delay on market orders. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G1, G14, G18 Research Theme(s): Financial markets and funds management, Market functioning, Market structure
March 17, 2008 Price Discovery Across Geographic Locations in the Foreign Exchange Market Bank of Canada Review - Spring 2008 Chris D'Souza The ongoing process of price discovery in foreign exchange markets provides valuable information to certain market participants. Recent empirical findings suggest that aggregate measures of order flow convey information about the fundamental value of the exchange rate. Using a market microstructure approach, D'Souza reports on a two-year study of completed transactions within the Canadian and Australian exchange rate markets to examine the relationship between exchange rate returns and trades initiated in different locations. Based on the information content of the trades, he finds that geographic location and hours of operation are two of the factors driving informed interdealer trading. Content Type(s): Publications, Bank of Canada Review articles
Following the Money: Evidence for the Portfolio Balance Channel of Quantitative Easing Staff working paper 2018-33 Itay Goldstein, Jonathan Witmer, Jing Yang Recent research suggests that quantitative easing (QE) may affect a broad range of asset prices through a portfolio balance channel. Using novel security-level holding data of individual US mutual funds, we establish evidence that portfolio rebalancing occurred both within and across funds. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E58, G, G2, G23 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
November 16, 2016 Follow the Money: A Canadian Perspective on Financial Globalization Remarks Timothy Lane Centre for International Governance Innovation (CIGI) Waterloo, Ontario Deputy Governor Timothy Lane discusses the benefits and challenges of international capital mobility. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Currency, Digital currency, Financial system, Financial markets, Financial stability, Monetary policy, Economy/Economic growth
Crypto ‘Money’: Perspective of a Couple of Canadian Central Bankers Staff discussion paper 2019-1 James Chapman, Carolyn A. Wilkins The market for cryptoassets has exploded in size in the 10 years since bitcoin was launched. The technology underlying cryptoassets, blockchain, has also been held up as a technology that promises to transform entire industries. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E4, E41, E42, E5, E51, E58, H, H4, P, P4, P43 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Money and payments, Cash and bank notes, Digital assets and fintech, Payment and financial market infrastructures
May 22, 2004 Exchange Rate Pass-Through in Industrialized Countries Bank of Canada Review - Spring 2004 Jeannine Bailliu, Hafedh Bouakez Economists' long-standing interest in the degree to which exchange rate movements are reflected in prices was rekindled in the 1970s by a combination of rising inflation and the adoption of more flexible exchange rate regimes in many industrialized countries. Specifically, there were concerns that a large currency depreciation could degenerate into an inflationary spiral. Such fears were curtailed in the 1980s and early 1990s as industrialized countries began to reduce and stabilize their inflation rates. The low-inflation period most industrialized countries entered approximately a decade ago coincided with significant exchange rate depreciations that had much smaller effects on consumer prices than expected. This led to a belief that the extent to which exchange rate movements are passed through to consumer prices has declined. In this article, the authors examine why pass-through could be incomplete and review empirical estimates to determine whether pass-through has indeed declined, suggesting possible reasons for this decline and discussing the implications for monetary policy. Content Type(s): Publications, Bank of Canada Review articles