Robert Lafrance - Latest

• December 15, 1999

  The Exchange Rate, Productivity, and the Standard of Living

  Bank of Canada Review - Winter 1999–2000 Robert Lafrance, Lawrence L. Schembri

  This article examines the recent proposition that the decline in Canada's standard of living relative to that of the United States is causally related to the decline in our exchange rate. The authors explore the main channels through which the exchange rate and the standard of living could be related—productivity and the terms of trade—focusing mainly on productivity. They conclude that the decline in world commodity prices and weak demand for domestic output were affecting both Canada's standard of living and the exchange rate and that the flexible exchange rate regime itself did not play an independent role.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Exchange rates
• November 14, 1999

  Real Exchange Rate Indexes for the Canadian Dollar

  Bank of Canada Review - Autumn 1999 Robert Lafrance, Pierre St-Amant

  In this article, the authors explain the methodology used to construct real exchange rate (RER) indexes. They also compare and assess various Canadian RER indexes from both an empirical and conceptual standpoint. The authors conclude that both theory and empirical evidence suggest that the best RER indexes are those based on unit labour costs. They note, however, that, for practical reasons, policy-makers should also consider RER indexes based on prices when formulating monetary policy.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Exchange rates

• Optimal Currency Areas: A Review of the Recent Literature

  Staff Working Paper 1999-16 Robert Lafrance, Pierre St-Amant

  This paper surveys the recent literature on optimal currency areas (OCAs). Topics that are covered include theoretical developments in the context of general-equilibrium models and empirical work on shocks asymmetry and adjustment mechanisms. Issues relating to the endogeneity of OCA criteria, the role of exchange rate flexibility in promoting greater macroeconomic stability, and the links […]

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rate regimes JEL Code(s): E, E4, E42, F, F3, F33