October 22, 2006
October 22, 2006
Bank of Canada Review - Autumn 2006
The "pretended" Bank of Upper Canada — Kingston (1819-22)
The note is part of the National Currency Collection of the Bank of Canada.
Photography by Gord Carter
October 20, 2006
MUSE: The Bank of Canada's New Projection Model of the U.S. EconomyStaff projections provided for the Bank of Canada's monetary policy decision process take into account the integration of Canada's very open economy within the global economy, as well as its close real and financial linkages with the United States. To provide inputs for this projection, the Bank has developed several models, including MUSE, NEUQ (the New European Quarterly Model), and BoC-GEM (Bank of Canada Global Economy Model), to analyze and forecast economic developments in the rest of the world. The authors focus on MUSE, the model currently used to describe interaction among the principal U.S. economic variables, including gross domestic product, inflation, interest rates, and the exchange rate. Brief descriptions are also provided of NEUQ and BoC-GEM.
October 19, 2006
Monetary Policy Report – October 2006The Canadian economy continues to operate just above its full production capacity, and the near-term outlook for core inflation has moved slightly higher.
October 8, 2006
Modelling Financial Channels for Monetary Policy AnalysisThe Bank of Canada considers a wide range of information and analysis before making a monetary policy decision and uses carefully articulated models to produce economic projections and to examine alternative scenarios. This article describes an ongoing research agenda at the Bank to develop models in which financial variables play an active role in the transmission of monetary policy actions to economic activity. Such models can help to analyze information from the financial side of the economy and to provide an overall view of the implications of financial developments for the current economic outlook. The authors also explain how this research can help address other issues relevant to the objectives of monetary policy, including how asset-price movements should be taken into account in the monetary policy framework.
October 6, 2006
Business Outlook Survey - Autumn 2006Overall, businesses continue to be positive about the economic outlook.
October 3, 2006
A New Effective Exchange Rate Index for the Canadian DollarAn effective exchange rate is a measure of the value of a country's currency vis-à-vis the currencies of its most important trading partners. The Bank of Canada has created a new Canadian-dollar effective exchange rate index (CERI) to replace the C-6 index that it currently uses. The CERI uses multilateral trade weights published by the International Monetary Fund and includes the six currencies of countries or economic zones with the largest share of Canada's international trade. As such, it better reflects the recent changes in Canada's trade profile, including the rise in the importance of China and Mexico and the relative decline in importance of Europe and Japan in Canada's international trade. The author describes the methodology and construction of the new index and reviews the advantages it offers over the C-6, particularly the use of multilateral trade weights, the inclusion of trade in services, and the use of more recent trade data.