Topic: Inflation and prices

1. New Phillips Curve with Alternative Marginal Cost Measures for Canada, the United States, and the Euro Area

   Working Paper 2001-25 - Edith Gagnon, Hashmat Khan

   Recent research on the new Phillips curve (NPC) (e.g., Galí, Gertler, and López-Salido 2001a) gives marginal cost an important role in capturing pressures on inflation. In this paper we assess the case for using alternative measures of marginal cost to improve the empirical fit of the NPC.

   Topics: Economic models; Inflation and prices

2. Evaluating Factor Models: An Application to Forecasting Inflation in Canada

   Working Paper 2001-18 - Marc-André Gosselin, Greg Tkacz

   This paper evaluates the forecasting performance of factor models for Canadian inflation. This type of model was introduced and examined by Stock and Watson (1999a), who have shown that it is quite promising for forecasting U.S. inflation.

   Topics: Econometric and statistical methods; Inflation and prices

3. On the Nature and the Stability of the Canadian Phillips Curve

   Working Paper 2001-4 - Maral Kichian

   This paper empirically determines why, during the 1990s, inflation in Canada was consistently more stable than predicted by the fixed-coefficients Phillips curve. A time-varying-coefficient model, where all the parameters adjust simultaneously, shows that the behaviour of expectations was probably a major contributing factor.

   Topics: Business fluctuations and cycles; Econometric and statistical methods; Inflation and prices

4. Core Inflation

   Technical Report 2001-89 - Seamus Hogan, Marianne Johnson, Thérèse Laflèche

   The Bank of Canada uses core CPI inflation, the year-over-year rate of change of the consumer price index excluding food, energy, and the effects of changes in indirect taxes, as the operational guide for monetary policy.

   Topics: Inflation and prices