The New Keynesian Hybrid Phillips Curve: An Assessment of Competing Specifications for the United States Staff Working Paper 2004-31 David Dupuis Inflation forecasting is fundamental to monetary policy. In practice, however, economists are faced with competing goals: accuracy and theoretical consistency. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Inflation and prices JEL Code(s): E, E3, E31
The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data Staff Working Paper 2004-1 Danny Leung A basic neoclassical model of production is often used to assess the contribution of investment to output growth. In the model, investment raises the capital stock and output growth increases in proportion to the growth in capital. Content Type(s): Staff research, Staff working papers Research Topic(s): Productivity JEL Code(s): O, O3, O31, O4, O49
Assessment of the Effects of Macroprudential Tightening in Canada Staff Analytical Note 2016-12 Martin Kuncl During the period of 2008 to 2012, the rules for government-backed mortgage insurance were tightened on four occasions. In this note, we estimate the effects through a simple econometric exercise using a vector error-correction model (VECM). Content Type(s): Staff research, Staff analytical notes Research Topic(s): Credit and credit aggregates, Financial system regulation and policies, Housing JEL Code(s): C, C3, C32, E, E6, E65, G, G2, G28
Estimating the Appropriate Quantity of Settlement Balances in a Floor System Staff Discussion Paper 2023-26 Narayan Bulusu, Matthew McNeely, Kaetlynd McRae, Jonathan Witmer This paper presents two complementary approaches to estimating the appropriate quantity of settlement balances needed to effectively operate monetary policy under a floor system in Canada. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions, Financial markets, Financial system regulation and policies, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42, E5, E52, E58, G, G2, G21, G28
November 17, 2016 Structural Reforms and Economic Growth in Emerging-Market Economies Bank of Canada Review - Autumn 2016 Jeannine Bailliu, Christopher Hajzler Growth has slowed in many emerging-market economies (EMEs) since the 2007–09 global financial crisis, reflecting both cyclical and structural factors. In this context, it will be in-creasingly important for EMEs to raise potential growth by maintaining steady progress on structural reforms. How do structural reforms generally support growth? What are the re-form priorities for EMEs over recent history and today? Finally, what will be the impact of planned structural reforms on potential output growth among the world’s larger EMEs? These are some of the questions considered by the authors. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Development economics, International topics, Potential output JEL Code(s): E, E0, E02, E6, E61, E65, O, O1, O11, O4, O41
Switching Between Chartists and Fundamentalists: A Markov Regime-Switching Approach Staff Working Paper 1996-1 Robert Vigfusson Since the early 1980s, models based on economic fundamentals have been poor at explaining the movements in the exchange rate (Messe 1990). In response to this problem, Frankel and Froot (1988) developed a model that uses two approaches to forecast the exchange rate: the fundamentalist approach, which bases the forecast on economic fundamentals, and the chartist approach, which bases the forecast on the past behaviour of the exchange rate. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets JEL Code(s): C, C4, C40, G, G1, G12
Launching the NEUQ: The New European Union Quarterly Model, A Small Model of the Euro Area and U.K. Economies Staff Working Paper 2006-22 Anna Piretti, Charles St-Arnaud The authors develop a projection model of the euro area and the United Kingdom. The model consists of two country blocks, endogenous to each other via the foreign demand channel. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): C, C5, C53, E, E1, E17, E3, E37
Price Level Targeting: What Is the Right Price? Staff Working Paper 2010-8 Malik Shukayev, Alexander Ueberfeldt Various papers have suggested that Price-Level targeting is a welfare improving policy relative to Inflation targeting. From a practical standpoint, this raises an important yet unanswered question: What is the optimal price index to target? Content Type(s): Staff research, Staff working papers Research Topic(s): Monetary policy framework JEL Code(s): E, E3, E32, E5, E52
The Quantity of Money and Monetary Policy Staff Working Paper 1999-5 David Laidler The relationships among the quantity theory of money, monetarism and policy regimes based on money-growth and inflation targeting are briefly discussed as a prelude to an exposition of alternative views of money's role in the transmission mechanism of monetary policy. The passive-money view treats the money supply as an endogenous variable that plays no role […] Content Type(s): Staff research, Staff working papers Research Topic(s): Monetary aggregates, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E5, E51, E52
What Drives Exchange Rates? New Evidence from a Panel of U.S. Dollar Bilateral Exchange Rates Staff Working Paper 2010-5 Jean-Philippe Cayen, Donald Coletti, René Lalonde, Philipp Maier We use a novel approach to identify economic developments that drive exchange rates in the long run. Using a panel of six quarterly U.S. bilateral real exchange rates – Australia, Canada, the euro, Japan, New Zealand and the United Kingdom – over the 1980-2007 period, a dynamic factor model points to two common factors. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Exchange rates JEL Code(s): J, J3, J31