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2092 Results

April 8, 2009

Price-Level Targeting and Stabilization Policy: A Review

This article reviews arguments in the literature for and against price-level targeting, focusing on its costs and benefits compared with inflation targeting. Benefits of price-level targeting include the effect on forward-looking inflation expectations; the ability to substitute for commitment by a central bank to its future policies; lessening forecast errors; better economic performance in response to real shocks because of lower wage indexation; and a reduction in the problem of the zero lower bound on nominal interest rates.

Canadian Bank Notes and Dominion Notes: Lessons for Digital Currencies

Staff working paper 2017-5 Ben Fung, Scott Hendry, Warren E. Weber
This paper studies the period in Canada when both private bank notes and government-issued notes (Dominion notes) were simultaneously in circulation. Because both of these notes shared many of the characteristics of today's digital currencies, the experience with these notes can be used to draw lessons about how digital currencies might perform.

Endogenous Credibility and Wage-Price Spirals

Staff working paper 2024-14 Olena Kostyshyna, Tolga Özden, Yang Zhang
We quantitively assess the risks of a wage-price spiral occurring in Canada over history. We find the risk of a wage-price spiral increases when the inflation expectations become unanchored and the credibility of central banks declines.

Assessing the US and Canadian neutral rates: 2024 update

We assess both the US and Canadian nominal neutral rates to be in the range of 2.25% to 3.25%, somewhat higher than the range of 2.0% to 3.0% in 2023. The assessed range is back to the level it was at in April 2019.
February 23, 2012

Medium-Term Fluctuations in Canadian House Prices

This article draws on theory and empirical evidence to examine a number of factors behind movements in Canadian house prices. It begins with an overview of the movements in house prices in Canada, using regional data to highlight factors that influence prices over the long run. It then turns to the central theme, that there are medium-run movements in prices not accounted for by long-run factors. Drawing on recent Bank of Canada research, the article discusses several factors behind these medium-run movements, including interest rates, expected price appreciation and market liquidity. The article concludes by identifying areas for future research that would further our understanding of fluctuations in house prices.
Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): R, R2, R21, R3, R31
November 17, 2011

Modelling the Counterfeiting of Bank Notes: A Literature Review

The objective of this article is to improve our understanding of counterfeiting and its policy implications by reviewing research in this area. There has been almost no empirical work on counterfeiting because of the limited availability of counterfeiting data and related statistics. The authors therefore focus on theoretical studies that directly model the behaviour of the relevant economic agents. They first establish some stylized facts about counterfeiting to provide a general understanding of the problem. They then briefly review several models of counterfeiting and summarize their relevant insights, focusing on the implications of the findings for the incentive to counterfeit, social welfare and anti-counterfeiting policies. The authors find that the policy implications of these studies support the Bank’s comprehensive anti-counterfeiting strategy.

A Three‐Frequency Dynamic Factor Model for Nowcasting Canadian Provincial GDP Growth

Staff discussion paper 2017-8 Tony Chernis, Gabriella Velasco, Calista Cheung
This paper estimates a three‐frequency dynamic factor model for nowcasting Canadian provincial gross domestic product (GDP). Canadian provincial GDP is released by Statistics Canada on an annual basis only, with a significant lag (11 months).
June 8, 2017

Canada’s International Investment Position: Benefits and Potential Vulnerabilities

While greater global financial integration is beneficial, the authors discuss how foreign capital inflows can also facilitate the buildup of domestic vulnerabilities and potentially lead to destabilizing reversals. Canada’s current international investment position is typical of advanced economies and will likely continue to act as an economic stabilizer. However, the growth and composition of Canada’s international investment position warrant continued monitoring.
Content Type(s): Publications, Financial System Review articles JEL Code(s): F, F2, F21, F3, F32, F34, F36, F4, F6
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