Macroeconomic Determinants of the Term Structure of Corporate Spreads Staff Working Paper 2008-29 Jun Yang We investigate the macroeconomic determinants of corporate spreads using a no-arbitrage technique. Structural shocks are identified by a New-Keynesian model. Treasury bonds are priced in an affine model with time-varying risk premia. Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Financial markets, Interest rates JEL Code(s): E, E4, E43, E44, G, G1, G12
September 3, 2008 Bank of Canada keeps overnight rate target at 3 per cent Media Relations Ottawa, Ontario The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3 per cent. Content Type(s): Press, Press releases
The Welfare Implications of Fiscal Dominance Staff Working Paper 2008-28 Carlos De Resende, Nooman Rebei This paper studies the interdependence between fiscal and monetary policy in a DSGE model with sticky prices and non-zero trend inflation. We characterize the fiscal and monetary policies by a rule whereby a given fraction k of the government debt must be backed by the discounted value of current and future primary surpluses. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Inflation: costs and benefits, Monetary policy framework JEL Code(s): E, E3, E31, E4, E42, E5, E50, E6, E63
Are Bygones not Bygones? Modeling Price Level Targeting with an Escape Clause and Lessons from the Gold Standard Staff Working Paper 2008-27 Paul Masson, Malik Shukayev Like the gold standard, price level targeting (PT) involves not letting past deviations of inflation be bygones; both regimes return the price level (or price of gold) to its target. The experience of suspension of the gold standard in World War I, resumption in the 1920s (for some countries at a different parity), and final abandonment is reviewed. Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52
August 26, 2008 Bank of Canada Announces the Recipients of its 2008 Law Enforcement Award of Excellence for Counterfeit Deterrence Media Relations Ottawa, Ontario The Bank of Canada is pleased to announce the recipients of its 2008 Law Enforcement Award of Excellence for Counterfeit Deterrence. Content Type(s): Press, Press releases
August 26, 2008 Work in Progress: The Bank of Canada's Response to the Financial Turbulence Remarks David Longworth Canadian Association for Business Economics Kingston, Ontario The financial turbulence over the past year has been costly and difficult for many individuals and financial institutions; it's been challenging for policy-makers; and it's had implications for the overall economy. Content Type(s): Press, Speeches and appearances, Remarks
Merchant Acceptance, Costs, and Perceptions of Retail Payments: A Canadian Survey Staff Discussion Paper 2008-12 Carlos Arango, Varya Taylor Using the results of a survey on accepted means of payment, the authors examine merchant preferences and perceptions of retail payment reliability, risk, and costs; the share of each type of payment method over total sales; and the costs involved in accepting payments. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes JEL Code(s): E, E4, E41, L, L2
Price-Level versus Inflation Targeting with Financial Market Imperfections Staff Working Paper 2008-26 Francisco Covas, Yahong Zhang This paper compares price-level-path targeting (PT) with inflation targeting (IT) in a sticky-price, dynamic, general equilibrium model augmented with imperfections in both the debt and equity markets. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Inflation targets, Monetary policy framework JEL Code(s): E, E4, E40, E5, E50
Good Policies or Good Fortune: What Drives the Compression in Emerging Market Spreads? Staff Working Paper 2008-25 Philipp Maier, Garima Vasishtha Since 2002, spreads on emerging market sovereign debt have fallen to historical lows. Given the close links between sovereign spreads, capital flows to emerging markets, and economic growth, understanding the factors driving these spreads is very important. We address this issue in two stages. Content Type(s): Staff research, Staff working papers Topic(s): Development economics, Financial stability, International topics JEL Code(s): E, E4, E43, F, F3, F34, G, G1, G12, G15
Do Central Banks Respond to Exchange Rate Movements? Some New Evidence from Structural Estimation Staff Working Paper 2008-24 Wei Dong This paper investigates the impact of exchange rate movements on the conduct of monetary policy in Australia, Canada, New Zealand and the United Kingdom. We develop and estimate a structural general equilibrium two-sector model with sticky prices and wages and limited exchange rate pass-through. Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, International topics, Monetary policy framework JEL Code(s): F, F3, F4