Staff research, Publications

• October 22, 2003

  Monetary Policy Report – October 2003

  

  In the April Monetary Policy Report, the Bank noted that inflation was well above its 2 per cent target and that short-term inflation expectations had edged up.

  Content Type(s): Publications, Monetary Policy Report

• Governance and Financial Fragility: Evidence from a Cross-Section of Countries

  Staff Working Paper 2003-34 Michael Francis

  The author explores the role of governance mechanisms as a means of reducing financial fragility. First, he develops a simple theoretical general-equilibrium model in which instability arises due to an agency problem resulting from a conflict of interest between the borrower and lender.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Financial markets JEL Code(s): G, G0

• Do Peer Group Members Outperform Individual Borrowers? A Test of Peer Group Lending Using Canadian Micro-Credit Data

  Staff Working Paper 2003-33 Rafael Gomez, Eric Santor

  Microfinance institutions now serve over 10 million poor households in the developing and developed world, and much of their success has been attributed to their innovative use of peer group lending. There is very little empirical evidence, however, to suggest that group lending schemes offer a superior institutional design over lending programs that serve individual borrowers.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Development economics JEL Code(s): E, J, J2, J23, O, O1, O17

• The Canadian Phillips Curve and Regime Shifting

  Staff Working Paper 2003-32 Frédérick Demers

  Phillips curves are generally estimated under the assumption of linearity and parameter constancy. Linear models of inflation, however, have recently been criticized for their poor forecasting performance.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Inflation and prices JEL Code(s): C, C5, C52, E, E3, E31

• A Simple Test of Simple Rules: Can They Improve How Monetary Policy is Implemented with Inflation Targets?

  Staff Working Paper 2003-31 Nicholas Rowe, David Tulk

  The authors evaluate whether an assortment of simple rules could improve how the Bank of Canada implements its inflation-targeting monetary policy. They focus on measuring the correlation between the deviations of inflation from the target and the lagged deviations of rule recommendations from the actual policy interest rate.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation targets, Monetary policy implementation JEL Code(s): E, E5

• Are Wealth Effects Important for Canada?

  Staff Working Paper 2003-30 Lise Pichette, Dominique Tremblay

  The authors examine the link between consumption and disaggregate wealth in Canada. They use a vector-error-correction model in which permanent and transitory shocks are identified using the restrictions implied by cointegration proposed by King, Plosser, Stock, and Watson (1991) and Gonzalo and Granger (1995).

  Content Type(s): Staff research, Staff working papers Research Topic(s): Domestic demand and components JEL Code(s): C, C3, C32, E, E2, E21