Optimal Monetary Policy during Endogenous Housing-Market Boom-Bust Cycles Staff Working Paper 2009-32 Hajime Tomura This paper uses a small-open economy model for the Canadian economy to examine the optimal Taylor-type monetary policy rule that stabilizes output and inflation in an environment where endogenous boom-bust cycles in house prices can occur. Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Financial stability, Inflation targets JEL Code(s): E, E4, E44, E5, E52
Real Time Detection of Structural Breaks in GARCH Models Staff Working Paper 2009-31 Zhongfang He, John M. Maheu A sequential Monte Carlo method for estimating GARCH models subject to an unknown number of structural breaks is proposed. Particle filtering techniques allow for fast and efficient updates of posterior quantities and forecasts in real time. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial markets JEL Code(s): C, C1, C11, C15, C2, C22, C5, C53
November 12, 2009 Deputy Governor David Longworth to Retire from the Bank of Canada Media Relations Ottawa, Ontario The Bank of Canada announced today that Deputy Governor David Longworth will retire on 31 March 2010. Content Type(s): Press, Press releases
November 12, 2009 New Frontiers in Monetary Policy Design Conference Proceedings held 12 and 13 November 2009 (papers in unedited, electronic format only) Content Type(s): Conferences and workshops
November 11, 2009 Declining Inflation Persistence in Canada: Causes and Consequences Bank of Canada Review - Winter 2009-2010 Rhys R. Mendes, Stephen Murchison The persistence of both core and total consumer price index inflation in Canada has declined significantly since the 1980s. In addition to providing up-to-date estimates of inflation persistence, this article examines possible reasons for the decline suggested in the literature. The role played by monetary policy, through its effect on price- and wage-setting behaviour, is distinguished from possible changes to the structure of the economy that are independent of monetary policy. The authors also discuss the implications for monetary policy of low structural persistence in inflation, including the choice of an inflation-targeting regime versus a price-level-targeting regime. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation and prices, Monetary policy framework
November 11, 2009 The Evolution of Capital Flows to Emerging-Market Economies Bank of Canada Review - Winter 2009-2010 Lena Suchanek, Garima Vasishtha Many emerging-market economies (EMEs) have significantly improved their macroeconomic fundamentals and undergone structural reforms since the Asian crisis. These developments have enhanced the composition of capital flows to EMEs through an improved debt structure, a larger share of capital flows as foreign direct investment, and greater access to international debt markets for corporations in EMEs. Structural changes in the global financial landscape have also increased capital flows, bringing economic and financial benefits to EMEs. During the recent financial crisis, however, the opening up of capital accounts and increased financial and trade linkages left many countries vulnerable to external disruptions. Countries with sound fundamentals have weathered the crisis relatively well. Policy-makers in EMEs need to implement policies that support capital flows and ensure that controls imposed to deal with detrimental outflows during periods of stress or rapid inflows are only temporary. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Development economics, Financial markets, Financial system regulation and policies
November 11, 2009 Making Bank Notes Accessible for Canadians Living with Blindness or Low Vision Bank of Canada Review - Winter 2009-2010 Carolyn Samuel The ability to conduct financial transactions using bank notes is crucial to independent living. Yet this can pose significant challenges for individuals who are blind or partially sighted. This article discusses the Bank of Canada's efforts over the past 30 years to meet the accessibility needs of a specific subset of the population–Canadians living with blindness or vision loss. It also reports the findings of expert and user assessments of the suite of accessibility features on the current series of bank notes and shares plans for the next series. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Bank notes, Central bank research
November 9, 2009 Results of the 9 November 2009 Term PRA Transaction The results of today's term PRA operations are as follows. Content Type(s): Press, Market notices
November 6, 2009 Bank of Canada Announces Details of its Term PRA Operation In accordance with the schedule of term purchase and resale agreement (PRA) auctions announced on 20 October (see schedule), the Bank of Canada announced today that it will conduct a term PRA operation as follows. Content Type(s): Press, Market notices
November 5, 2009 Changes to Policy Regarding the Non-Mortgage Loan Portfolio as Collateral for the Bank of Canada's Standing Liquidity Facility (SLF) Given improved conditions in funding markets, the Bank of Canada is announcing that, starting 2 February 2010, its temporary measure of allowing Large Value Transfer System (LVTS) participants to assign their non-mortgage loan portfolios as eligible collateral for LVTS and Standing Liquidity Facility (SLF) purposes will be gradually reduced from 100 per cent to 20 per cent of each participant's total pledged collateral. Content Type(s): Press, Market notices