Complementarities Between Fiscal Policy and Monetary Policy—Literature Review Staff Discussion Paper 2021-4 Wei Dong, Geoffrey R. Dunbar, Christian Friedrich, Dmitry Matveev, Romanos Priftis, Lin Shao This paper surveys and summarizes the literature on how fiscal policy and monetary policy can complement each other in stabilizing economic activity. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Fiscal policy, Monetary policy JEL Code(s): E, E5, E52, E58, E6, E62, E63
Market Valuation and Risk Assessment of Canadian Banks Staff Working Paper 2004-34 Ying Liu, Mingwei Yuan, Eli Papakirykos The authors apply the asset-valuation model developed by Rabinovitch (1989) to six publicly traded Canadian banks over the period 1982–2002. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions JEL Code(s): G, G1, G12, G2, G21
Has the Inflation Process Changed? Selective Review of Recent Research on Inflation Dynamics Staff Discussion Paper 2020-11 Oleksiy Kryvtsov, James (Jim) C. MacGee From 2011 to 2019, inflation in Canada and advanced economies usually registered below inflation targets, spurring the debate on whether the inflation process has changed. This paper highlights emerging questions that will influence the conduct of monetary policy in Canada in the near term. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Central bank research, Inflation and prices, Monetary policy JEL Code(s): E, E3, E31, E5, E52
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 Research Topic(s): Central bank research, Inflation targets, Monetary policy, Monetary policy communications, Monetary policy transmission JEL Code(s): D, D8, D83, E, E3, E37, E5, E52, E58
Payments on Digital Platforms: Resiliency, Interoperability and Welfare Staff Working Paper 2021-19 Jonathan Chiu, Tsz-Nga Wong This paper studies the business model choice between running a cash platform and a token platform, as well as its welfare and policy implications. Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Monetary policy, Payment clearing and settlement systems JEL Code(s): E, E4, E5, L, L5
April 9, 2009 Bank of Canada Review - Spring 2009 Examination of progress in the Bank’s exploration of two alternatives to the current inflation-targeting framework: (i) lowering the inflation target and (ii) shifting to a price-level target; a review of arguments for and against price-level targeting, focusing on its costs and benefits compared with inflation targeting; assessing the merits of price-level targeting vis-à-vis inflation targeting from a debt-revaluation perspective; quantifying redistribution of wealth in Canada in the face of unexpected inflation. Content Type(s): Publications, Bank of Canada Review
December 13, 1999 Feedback Rules for Inflation Control: An Overview of Recent Literature Bank of Canada Review - Winter 1999–2000 Agathe Côté, Jamie Armour Feedback rules are rules aimed at guiding policy-makers as they face the problem of keeping inflation close to a desired path without causing variability elsewhere in the economy. These rules link short-term interest rates, controlled by the central bank, to the rate of inflation and/or its deviation from a target rate. The authors describe the most popular types of feedback rules and review some simulation results. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Interest rates
Learning-by-Doing or Habit Formation? Staff Working Paper 2005-15 Hafedh Bouakez, Takashi Kano In a recent paper, Chang, Gomes, and Schorfheide (2002) extend the standard real business cycle (RBC) model to allow for a learning-by-doing (LBD) mechanism whereby current labour supply affects future productivity. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Economic models, Labour markets JEL Code(s): C, C5, C52, E, E3, E32, J, J2, J22
Predetermined Prices and the Persistent Effects of Money on Output Staff Working Paper 2001-13 Michael Devereux, James Yetman This paper illustrates a model of predetermined pricing, where firms set a fixed schedule of nominal prices at the time of price readjustment, based on the work of Fischer (1977). This type of price-setting specification cannot produce any excess persistence in a fixed-duration model of staggered prices, but we show that with a probabilistic model of price adjustment, as in Calvo (1983), a predetermined pricing specification can produce excess persistence. Content Type(s): Staff research, Staff working papers Research Topic(s): Monetary policy transmission JEL Code(s): E, E3, E30