Staff working papers

• Price Level Targeting: What Is the Right Price?

  Staff Working Paper 2010-8 Malik Shukayev, Alexander Ueberfeldt

  Various papers have suggested that Price-Level targeting is a welfare improving policy relative to Inflation targeting. From a practical standpoint, this raises an important yet unanswered question: What is the optimal price index to target?

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy framework JEL Code(s): E, E3, E32, E5, E52

• Time Variation in Okun's Law: A Canada and U.S. Comparison

  Staff Working Paper 2010-7 Kimberly Beaton

  This article investigates the stability of Okun's law for Canada and the United States using a time varying parameter approach. Time variation is modeled as driftless random walks and is estimated using the median unbiased estimator approach developed by Stock and Watson (1998).

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Labour markets JEL Code(s): E, E2, E24, J, J0, J00

• Assembling a Real-Financial Micro-Dataset for Canadian Households

  Staff Working Paper 2010-6 Umar Faruqui

  The lack of consolidated Canadian micro data on household balance sheets and expenditures has been an important impediment to empirical research into real-financial linkages in the Canadian household sector. Our paper attempts to fill this data gap by merging household balance sheet data from the Canadian Financial Monitor survey with household expenditure data from the Survey of Household Spending.

  Content Type(s): Staff research, Staff working papers Topic(s): Sectoral balance sheet JEL Code(s): C, C8, C81, D, D1, D10

• What Drives Exchange Rates? New Evidence from a Panel of U.S. Dollar Bilateral Exchange Rates

  Staff Working Paper 2010-5 Jean-Philippe Cayen, Donald Coletti, René Lalonde, Philipp Maier

  We use a novel approach to identify economic developments that drive exchange rates in the long run. Using a panel of six quarterly U.S. bilateral real exchange rates – Australia, Canada, the euro, Japan, New Zealand and the United Kingdom – over the 1980-2007 period, a dynamic factor model points to two common factors.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Exchange rates JEL Code(s): J, J3, J31