E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

• Which Bank is the "Central" Bank? An Application of Markov Theory to the Canadian Large Value Transfer System

  Staff Working Paper 2008-42 Morten Bech, James Chapman, Rodney J. Garratt

  We use a method similar to Google's PageRank procedure to rank banks in the Canadian Large Value Transfer System (LVTS). Along the way we obtain estimates of the payment processing speeds for the individual banks.

  Content Type(s): Staff research, Staff working papers Topic(s): Payment clearing and settlement systems JEL Code(s): C, C1, C11, E, E5, E50, G, G2, G20

• Price Level Targeting in a Small Open Economy with Financial Frictions: Welfare Analysis

  Staff Working Paper 2008-40 Ali Dib, Caterina Mendicino, Yahong Zhang

  How important are the benefits of low price-level uncertainty? This paper explores the desirability of price-level path targeting in an estimated DSGE model fit to Canadian data. The policy implications are based on social welfare evaluations.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial stability, Inflation and prices, Monetary policy framework JEL Code(s): E, E3, E31, E32, E5, E52

• Adopting Price-Level Targeting under Imperfect Credibility: An Update

  Staff Working Paper 2008-37 Oleksiy Kryvtsov, Malik Shukayev, Alexander Ueberfeldt

  This paper measures the welfare gains of switching from inflation-targeting to price-level targeting under imperfect credibility. Vestin (2006) shows that when the monetary authority cannot commit to future policy, price-level targeting yields higher welfare than inflation targeting.

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52

• The Role of Bank Capital in the Propagation of Shocks

  Staff Working Paper 2008-36 Césaire Meh, Kevin Moran

  Recent events in financial markets have underlined the importance of analyzing the link between the financial health of banks and real economic activity. This paper contributes to this analysis by constructing a dynamic general equilibrium model in which the balance sheet of banks affects the propagation of shocks.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial institutions, Financial system regulation and policies, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E52, G, G2, G21