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85
result(s)
Downward Nominal Wage Rigidity in Canada: Evidence Against a “Greasing Effect”
Staff Working Paper 2017-31
Joel Wagner
The existence of downward nominal wage rigidity (DNWR) has often been used to justify a positive inflation target. It is traditionally assumed that positive inflation could “grease the wheels” of the labour market by putting downward pressure on real wages, easing labour market adjustments during a recession.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Labour markets
JEL Code(s):
E,
E2,
E24,
E5,
E52
Downward Nominal Wage Rigidity Meets the Zero Lower Bound
Staff Working Paper 2017-16
Robert Amano,
Stefano Gnocchi
We add downward nominal wage rigidity to a standard New Keynesian model with sticky prices and wages, where the zero lower bound on nominal interest rates is allowed to bind. We find that wage rigidity not only reduces the frequency of zero bound episodes but also mitigates the severity of corresponding recessions.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Labour markets,
Monetary policy framework
JEL Code(s):
E,
E2,
E24,
E3,
E32,
E5,
E52
May 16, 2016
The Micro and Macro of Downward Nominal Wage Rigidity
The article examines the extent of downward nominal wage rigidity in Canada and its implications for monetary policy. The authors ask whether its existence is a sufficient argument for a higher inflation target if concerns about the effective lower bound are adequately addressed.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
Inflation targets,
Labour markets,
Monetary policy framework
JEL Code(s):
E,
E3,
E4,
E5,
J,
J2,
J23,
J3,
J30
May 16, 2016
Monetary Policy Frameworks: Recent International Developments
Inflation-targeting frameworks have remained relatively stable over the past few years despite significant challenges, including prolonged low inflation, a large negative commodity price shock and rising financial stability concerns in some economies. The tools used by central banks have, however, evolved substantially. This article provides a survey of the developments in the inflation-targeting frameworks of 10 central banks in advanced economies that correspond to the three research areas of the Bank of Canada’s 2016 renewal: the level of the inflation target, the measurement of core inflation and financial stability considerations in the formulation of monetary policy.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation targets,
International topics,
Monetary policy framework
JEL Code(s):
E,
E5,
E52,
E58
Understanding Firms’ Inflation Expectations Using the Bank of Canada’s Business Outlook Survey
Staff Working Paper 2016-7
Simon Richards,
Matthieu Verstraete
Inflation expectations are a key determinant of actual and future inflation and thus matter for the conduct of monetary policy. We study how firms form their inflation expectations using quarterly firm-level data from the Bank of Canada’s Business Outlook Survey, spanning the 2001 to 2015 period.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Credibility,
Econometric and statistical methods,
Firm dynamics,
Inflation and prices,
Inflation targets,
Monetary policy framework
JEL Code(s):
C,
C1,
C2,
C25,
D,
D2,
D21,
D8,
D84,
E,
E3,
E31,
E5,
E52,
E58
Monetary Commitment and the Level of Public Debt
Staff Working Paper 2016-3
Stefano Gnocchi,
Luisa Lambertini
We analyze the interaction between committed monetary policy and discretionary fiscal policy in a model with public debt, endogenous government expenditures, distortive taxation and nominal rigidities.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Credibility,
Fiscal policy,
Inflation targets,
Monetary policy framework
JEL Code(s):
E,
E2,
E24,
E3,
E32,
E5,
E52
The Optimal Level of the Inflation Target: A Selective Review of the Literature and Outstanding Issues
Staff Discussion Paper 2015-8
Oleksiy Kryvtsov,
Rhys R. Mendes
Bank of Canada research done prior to the most recent renewal of the inflation-control agreement in 2011 concluded that the benefits associated with a target below 2 per cent were insufficient to justify the increased risk of being constrained by the zero lower bound (ZLB) on nominal interest rates.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Inflation targets,
Inflation: costs and benefits,
Monetary policy framework
JEL Code(s):
E,
E5,
E52,
E58
Targeting Inflation from Below - How Do Inflation Expectations Behave?
Staff Working Paper 2014-52
Michael Ehrmann
Inflation targeting (IT) had originally been introduced as a device to bring inflation down and stabilize it at low levels. Given the current environment of persistently weak inflation in many advanced economies, IT central banks must now bring inflation up to target.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Inflation targets
JEL Code(s):
C,
C5,
C53,
E,
E3,
E31,
E5,
E52,
E58
Central Bank Communications Before, During and After the Crisis: From Open-Market Operations to Open-Mouth Policy
Staff Working Paper 2013-41
Ianthi Vayid
The days when secrecy and opacity were the bywords of central banking are gone. The advent of inflation targeting in the early 1990s acted as the catalyst for enhanced transparency and communications in the conduct of monetary policy.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Credibility,
Financial stability,
Inflation targets,
Monetary policy framework,
Monetary policy implementation
JEL Code(s):
E,
E5,
E52,
E58