August 19, 2010 Conference Summary: New Frontiers in Monetary Policy Design Bank of Canada Review - Summer 2010 Robert Amano, Kevin Devereux, Rhys R. Mendes Although the current inflation-targeting regime has served Canadians well, sound public policy demands the continuous exploration of possible improvements in the monetary policy framework. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Central bank research, Inflation targets, Monetary policy framework
December 23, 2004 A Survey of the Price-Setting Behaviour of Canadian Companies Bank of Canada Review - Winter 2004-2005 David Amirault, Carolyn Kwan, Gordon Wilkinson To better understand price-setting behaviour in the Canadian economy, the Bank of Canada's regional offices surveyed a representative sample of 170 firms between July 2002 and March 2003. The authors discuss the reasons behind the survey, the methodology used to develop the questionnaire and conduct the interviews, and summarize the results. The study also assessed several explanations for holding prices steady despite market pressures for a change. The survey findings indicate that prices in Canada are relatively flexible and have become more flexible over the past decade. Price stickiness was generally found to originate in firms' fears of antagonizing customers or disturbing the goodwill or reputation developed with them. A detailed discussion of the results includes a consideration of their implications for monetary policy. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Inflation and prices, Monetary policy transmission
The Transmission of World Shocks to Emerging-Market Countries: An Empirical Analysis Staff Working Paper 2004-44 Brigitte Desroches The first step in designing effective policies to stabilize an economy is to understand business cycles. No country is isolated from the world economy and external shocks are becoming increasingly important. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rate regimes, International topics, Monetary policy transmission JEL Code(s): E, E3, E30, E32, E6, E61, F, F0, F02
Forecasting GDP Growth Using Artificial Neural Networks Staff Working Paper 1999-3 Greg Tkacz, Sarah Hu Financial and monetary variables have long been known to contain useful leading information regarding economic activity. In this paper, the authors wish to determine whether the forecasting performance of such variables can be improved using neural network models. The main findings are that, at the 1-quarter forecasting horizon, neural networks yield no significant forecast improvements. […] Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Monetary and financial indicators JEL Code(s): C, C4, C45, E, E3, E37, E4, E44
The Impact of Liquidity on Bank Profitability Staff Working Paper 2010-38 Étienne Bordeleau, Christopher Graham The recent crisis has underlined the importance of sound bank liquidity management. In response, regulators are devising new liquidity standards with the aim of making the financial system more stable and resilient. In this paper, the authors analyse the impact of liquid asset holdings on bank profitability for a sample of large U.S. and Canadian banks. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): G, G2, G21, G3, G32, G33
May 16, 2016 Bank of Canada Review - Spring 2016 This issue focuses on the upcoming renewal of Canada’s inflation-control target. Bank researchers discuss the estimate of the lower bound to policy interest rates in Canada. They also discuss downward nominal wage rigidity and whether its presence warrants considering a higher inflation target. The third article highlights the experience some international central banks have had with unconventional monetary policies. The final article describes monetary policy frameworks in 10 advanced economies. Content Type(s): Publications, Bank of Canada Review
November 13, 2014 Recent Developments in Experimental Macroeconomics Bank of Canada Review - Autumn 2014 Robert Amano, Oleksiy Kryvtsov, Luba Petersen This article describes experimental economics, in general, and new developments in experimental macroeconomics, in particular. The approach has a clear niche in providing evidence on economic phenomena that cannot be observed directly or that are difficult to measure. Experimental work conducted by Bank of Canada economists has shed light on a number of issues important to monetary policy, such as the relative efficacy between price-level and inflation targeting, and the nature of inflation expectations formation. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Inflation and prices, Monetary policy framework JEL Code(s): C, C9, E, E3, E31, E5, E52
Why Do Central Banks Smooth Interest Rates? Staff Working Paper 2001-17 Gabriel Srour It is commonly observed that central banks respond gradually to economic shocks, moving the interest rate in small discrete steps in the same direction over an extended period of time. This paper examines the empirical evidence regarding central banks' smoothing of interest rates, paying particular attention to the case of Canada. Content Type(s): Staff research, Staff working papers Research Topic(s): Monetary policy implementation JEL Code(s): E, E5
The Output-Inflation Trade-off in Canada Staff Discussion Paper 2024-7 Stefano Gnocchi, Fanny McKellips, Rodrigo Sekkel, Laure Simon, Yinxi Xie, Yang Zhang We explain how the Bank of Canada’s policy models capture the trade-off between output and inflation in Canada. We provide new estimates of the trade-off and contrast them with those in the Bank’s macroeconomic models. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Inflation and prices, Monetary policy transmission JEL Code(s): E, E3, E31, E5, E52
Three things we learned about the Lynx payment system Staff Analytical Note 2023-14 Nikil Chande, Zhentong Lu, Hiru Rodrigo, Phoebe Tian Canada transitioned to a new wholesale payment system, Lynx, in August 2021. Lynx is based on a real-time settlement model that eliminates credit risk in the system. This model can require more liquidity; however, Lynx’s design allows Canada’s wholesale payments to settle efficiently. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial institutions, Financial services, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): C, C1, C10, E, E4, E42, G, G2, G28