Search

This paper examines the effects of time-varying volatility on welfare. I construct a tractable endogenous growth model with recursive preferences, stochastic volatility, and capital adjustment costs.

Press releases announcing and explaining monetary policy decisions play a critical role in the communication strategy of central banks. Because of their market-moving potential, it is particularly important how they are drafted. Often, central banks start from the previous statement and update the earlier text with only small changes.

When it comes to understanding the influence of labour costs on inflation, average wage growth is a misleading indicator because it is affected by composition effects. We propose an alternative measure that corrects for these effects by using microdata from the Labour Force Survey. Our new measure has many desirable properties, including reduced volatility and a better relationship with labour market fundamentals.

Many central banks around the world have embraced inflation targeting as a monetary policy framework. Interest is growing, however, in price-level targeting as an alternative. The choice of frameworks has important consequences for financial contracts, most of which are not fully indexed to the price level. Changes in the price level therefore lead to changes in the real value of contracts.

This paper compares the distributional effects of conventional monetary policy and quantitative easing (QE) within an estimated open-economy DSGE model of the euro area.

This article describes the major trends in the growth of labour productivity in Canada since the early 1960s and summarizes our current knowledge about the causes of the historical patterns. Particular attention is given to the period since the mid-1990s during which productivity growth has been significantly higher in the United States than in Canada. The author reviews the empirical evidence on the contribution of information and communication technology to the recent difference between Canadian and U.S. rates of productivity growth. Other determinants of a country's productivity performance, such as human capital formation and openness to international trade, are also examined. The article concludes with an assessment of the prospects for an increase in the trend rate of productivity growth in Canada over the coming years.

This paper studies how the outcome of Bayesian persuasion depends on a sender’s information. I study a game in which, prior to the sender’s information disclosure, the designer can restrict the most informative signal that the sender can generate.

The size of China’s financial system raises the possibility that the liberalization of its capital account could have a large effect on the global financial system. This paper provides a counterfactual scenario analysis that estimates what the size and direction of China’s overseas portfolio investments would have been in 2015 if China had had no restrictions on these outflows.

Senior Deputy Governor Carolyn Wilkins discusses the state of the labour market, the impact of lower oil prices on Canada’s economic outlook and the importance of both for monetary policy.