August 15, 2001 Analyzing the Monetary Aggregates Bank of Canada Review - Summer 2001 Dinah Maclean In recent years, the Bank has put renewed emphasis on analyzing monetary variables and on developing models that incorporate money as an active part of the transmission mechanism. In this article, Dinah Maclean describes how the monetary aggregates are used in the formulation of monetary policy analysis at the Bank, outlining the key tools and models used. The most important money-based model currently in use is the M1-VECM. In this model, deviations in the money supply from the long-term demand for money cause changes in inflation. The author briefly describes the "active-money" paradigm underlying this model and explains the key equations within it. Other simpler empirical models are also outlined, including single-equation indicator models for output based on the narrow aggregates, a neural network, and a model based on the broader aggregate M2++. A detailed technical annex provides details on model equations and coefficient values. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Monetary aggregates
August 10, 2001 Proposed Terms and Conditions for Auctions of Receiver General Cash Balances On behalf of the Minister of Finance, the Department of Finance and Bank of Canada are releasing today draft terms and conditions for participation in Receiver General auctions. These auctions are the means by which the government invests its short-term Canadian dollar cash balances. Content Type(s): Press, Market notices
August 9, 2001 Expansion of List of Securities Eligible as Collateral for use in Bank of Canada Standing Liquidity Facility Under its Standing Liquidity Facility (SLF), the Bank of Canada is prepared to provide liquidity on a daily basis to financial institutions that participate directly in the payment systems operated by the Canadian Payments Association - the Automated Clearing Settlement System (ACSS) and the Large Value Transfer System (LVTS). Content Type(s): Press, Market notices
August 2, 2001 Summer Market Consultations 2001 Overview The objectives of debt strategy are to provide stable, low cost funding for the federal government, and to maintain and enhance a well-functioning market for Government of Canada securities. A key element of the strategy is to maintain a prudent debt structure, with approximately two-thirds of the debt stock in fixed-rate instruments. The Government […]
August 2, 2001 Summer Consultations - Market Views Sought on Issues Relating to the Design and Operation of Government Debt Programs over 2001-02 and Beyond A consultation document on issues relating to the design and operation of government debt programs over 2001-2002 and beyond, prepared jointly by the Department of Finance and the Bank of Canada, is being made public today. Content Type(s): Press, Market notices
Predetermined Prices and the Persistent Effects of Money on Output Staff Working Paper 2001-13 Michael Devereux, James Yetman This paper illustrates a model of predetermined pricing, where firms set a fixed schedule of nominal prices at the time of price readjustment, based on the work of Fischer (1977). This type of price-setting specification cannot produce any excess persistence in a fixed-duration model of staggered prices, but we show that with a probabilistic model of price adjustment, as in Calvo (1983), a predetermined pricing specification can produce excess persistence. Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy transmission JEL Code(s): E, E3, E30
August 1, 2001 Monetary Policy Report Update – August 2001 The Bank’s outlook for inflation and overall economic activity in Canada to the end of 2002 has not changed fundamentally from that presented in the May Monetary Policy Report. Content Type(s): Publications, Monetary Policy Report
August 1, 2001 Bank of Canada releases Monetary Policy Report Update Media Relations The Bank of Canada today released its Update to the May Monetary Policy Report, in which it discusses economic and financial trends in the context of Canada's inflation-control strategy. Content Type(s): Press, Press releases
July 18, 2001 Sheryl Kennedy Named Deputy Governor, Financial Markets Media Relations Sheryl Kennedy, Deputy Governor of the Bank of Canada, has been asked by the Bank's Board of Directors to serve as Deputy Governor, Financial Markets. She takes over the responsibilities formerly carried out by Tim Noël, who passed away last week. Content Type(s): Press, Press releases
July 17, 2001 Bank of Canada lowers key policy interest rate by 1/4 percentage point to 4 1/4 per cent Media Relations Ottawa, Ontario The Bank of Canada today announced that it is lowering its target for the overnight rate* by one-quarter of one percentage point to 4 1/4 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 4 1/2 per cent. Content Type(s): Press, Press releases