Some Implications of International Financial Integration for Canadian Public Policy Technical Report No. 57 William White The domestic capital markets of the major industrial countries have become more closely integrated over the last two decades, a by-product of regulatory and technological change. This paper considers some of the implications of those changes for Canadian public policy. While no profound implications are found for Canadian macroeconomic policies, which probably reflects a long […] Content Type(s): Staff research, Technical reports Topic(s): International topics JEL Code(s): E, E5, E50, F, F3, F33, H, H3, H30
Wage and Price Dynamics in Canada Technical Report No. 56 Barry Cozier This paper examines wage and price dynamics in Canada with a view towards testing the implications of a wage-price dynamics, according to which unit labour costs are determined by a wage Phillips curve while prices are set as a markup over unit labour costs. This model is compared to an alternative model in which excess […] Content Type(s): Staff research, Technical reports Topic(s): Inflation and prices JEL Code(s): C, C5, C51, C52, E, E2, E24, E3, E31
Some Evidence on Hysteresis and the Costs of Disinflation in Canada Technical Report No. 55 Barry Cozier, Gordon Wilkinson This paper addresses the following questions: How large are the output costs of disinflation in Canada? Are these costs temporary, as predicted by natural-rate models, or are they permanent, as predicted by hysteresis models? Are the costs of disinflation higher at lower rates of inflation? Are they higher when the economy is at or below […] Content Type(s): Staff research, Technical reports Topic(s): Labour markets JEL Code(s): E, E2, E24, E3, E31
February 26, 1991 Targets for Reducing Inflation March 1991 statement announcing the renewal of the agreement. Content Type(s): Press, Press releases
The Goal of Price Stability: A Review of the Issues Technical Report No. 54 Jack Selody The basic responsibility of a central bank is to preserve the value of money—that is, to maintain stability in the general level of prices. This report pulls together the main arguments for and against price stability as the appropriate goal for monetary policy. The available evidence suggests that the benefits of price stability are many […] Content Type(s): Staff research, Technical reports Topic(s): Inflation targets JEL Code(s): E, E3, E31, E5, E50
Measuring the Profitability and Effectiveness of Foreign Exchange Market Intervention: Some Canadian Evidence Technical Report No. 53 John Murray, Mark Zelmer, Shane Williamson When the major industrial countries decided to move to a system of managed flexible exchange rates following the collapse of the Bretton Woods system, many observers thought that this would reduce, if not eliminate, the need for official foreign exchange market intervention. During the past fifteen years, however, intervention in most countries, including Canada, has […] Content Type(s): Staff research, Technical reports Topic(s): Exchange rates JEL Code(s): F, F3, F31, G, G1, G14
International Interest Rate Linkages and Monetary Policy: A Canadian Perspective Technical Report No. 52 John Murray, Ritha Khemani This paper examines the implications of increased international capital mobility and asset substitutability for domestic monetary policy in a small open economy such as Canada. Alternative definitions of international financial market integration are presented and tested in the context of two popular macro models. In the main, results suggest that interest rate relationships in Canada […] Content Type(s): Staff research, Technical reports Topic(s): Interest rates, International topics JEL Code(s): E, E5, E50, F, F3, F33
Regional Disparities in Wage and Unemployment Rates in Canada: A Review of Some Issues Technical Report No. 51 Kathleen Day In this report the author considers three issues relating to regional disparities in Canada. First, the size of regional disparities in unemployment and wage rates is examined together with the patterns in these disparities over time. Next, various theories related to the causes of regional disparities are reviewed, focussing on their predictions regarding regional disparities […] Content Type(s): Staff research, Technical reports Topic(s): Labour markets, Regional economic developments JEL Code(s): E, E2, E24
The NAIRU in Canada: Concepts, Determinants and Estimates Technical Report No. 50 David Rose An important question that faces macroeconomic policy makers is whether the economy can absorb increases in aggregate demand without generating inflationary pressures. Many economists have found it useful to approach this issue by asking whether the economy is operating at a rate of unemployment consistent with inflation neither accelerating nor decelerating, all else being equal. […] Content Type(s): Staff research, Technical reports Topic(s): Labour markets JEL Code(s): E, E2, E24
An Analysis of the Information Content of Alternative Credit Aggregates Technical Report No. 49 Leslie Milton This study evaluates the information content of 25 measures of credit with respect to three macroeconomic variables—nominal spending, real spending and prices. Initially, simple descriptive techniques are used to assess the contemporaneous and leading relationships between the credit aggregates and the three goal variables. Next, bivariate vector autoregression models are constructed by regressing each of […] Content Type(s): Staff research, Technical reports Topic(s): Credit and credit aggregates JEL Code(s): E, E5, E51