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370
result(s)
Are Commodity Prices Useful Leading Indicators of Inflation?
Staff Discussion Paper 2009-5
Calista Cheung
Commodity prices have increased dramatically and persistently over the past several years, followed by a sharp reversal in recent months. These large and persistent movements in commodity prices raise questions about their implications for global inflation. The process of globalization has motivated much debate over whether global factors have become more important in driving the […]
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Business fluctuations and cycles,
Economic models,
Inflation and prices,
International topics,
Monetary policy transmission
JEL Code(s):
E,
E3,
E5,
E52,
E58
Canada and the IMF: Trailblazer or Prodigal Son?
Staff Discussion Paper 2009-1
Michael Bordo,
Lawrence L. Schembri,
Tamara Gomes
Canada played an important role in the postwar establishment of the International Monetary Fund (IMF), yet it was also the first major member to challenge the orthodoxy of the BrettonWoods par value system by abandoning it in 1950 in favour of a floating, market-determined exchange rate.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Exchange rate regimes,
Exchange rates,
Monetary policy framework
JEL Code(s):
E,
E5,
E52,
E58,
F,
F4,
F41,
F5,
F55,
N,
N7,
N72
Inventories, Markups, and Real Rigidities in Menu Cost Models
Staff Working Paper 2009-6
Oleksiy Kryvtsov,
Virgiliu Midrigan
Real rigidities that limit the responsiveness of real marginal cost to output are a key ingredient of sticky price models necessary to account for the dynamics of output and inflation. We argue here, in the spirit of Bils and Kahn (2000), that the behavior of marginal cost over the cycle is directly related to that of inventories, data on which is readily available.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Monetary policy transmission
JEL Code(s):
E,
E3,
E31,
F,
F1,
F12
Monetary Policy Lag, Zero Lower Bound, and Inflation Targeting
Staff Working Paper 2009-2
Shin-Ichi Nishiyama
Although the concept of monetary policy lag has historical roots deep in the monetary economics literature, relatively little attention has been paid to the idea. In this paper, we build on Svensson's (1997) inflation targeting framework by explicitly taking into account the lagged effect of monetary policy and characterize the optimal monetary policy reaction function both in the absence and in the presence of the zero lower bound on the nominal interest rate.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Monetary policy framework,
Monetary policy implementation
JEL Code(s):
C,
C6,
C63,
E,
E5,
E52,
E58
Financial Intermediation, Liquidity and Inflation
Staff Working Paper 2008-49
Jonathan Chiu,
Césaire Meh
This paper develops a search-theoretic model to study the interaction between banking and monetary policy and how this interaction affects the allocation and welfare. Regarding how banking affects the welfare costs of inflation: First, we find that, with banking, inflation generates smaller welfare costs.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Monetary policy framework
JEL Code(s):
E,
E4,
E40,
E5,
E50
November 11, 2008
The Market Impact of Forward-Looking Policy Statements: Transparency vs. Predictability
Central banks continuously strive to improve how they communicate to financial markets and the public in order to increase transparency. For this reason, many central banks have begun to include guidance on the policy rate in the form of forward-looking statements in their communications. This article examines the debate over the usefulness of providing such statements from both theoretical and empirical standpoints. The evidence presented here suggests that the use of forward-looking statements in Bank of Canada communications has made the Bank more predictable, but not necessarily more transparent.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Central bank research,
Interest rates,
Monetary policy transmission
November 11, 2008
Conference Summary: International Experience with the Conduct of Monetary Policy under Inflation Targeting
Central bankers from inflation-targeting and non-inflation-targeting countries around the world and several distinguished scholars assembled at the Bank of Canada in July 2008 to review the international experience in some detail. This article highlights topics covered in the special lectures and sessions, including how inflation targeting can manage external shocks, various ways in which monetary policy decisions are taken, and the issues of transparency and communications. It also reports on the discussion in the closing panel, which considered options for the future of inflation targeting.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Central bank research,
Inflation targets,
Monetary policy framework
McCallum Rules, Exchange Rates, and the Term Structure of Interest Rates
Staff Working Paper 2008-43
Antonio Diez de los Rios
McCallum (1994a) proposes a monetary rule where policymakers have some tendency to resist rapid changes in exchange rates to explain the forward premium puzzle.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Interest rates,
Monetary policy transmission
JEL Code(s):
E,
E4,
E43,
F,
F3,
F31,
G,
G1,
G12,
G15
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