June 22, 2010
Posts
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The Role of Expenditure Switching in the Global Imbalance Adjustment
In theory, nominal exchange rate movements can lead to “expenditure switching” when they generate changes in the relative prices of goods across countries. This paper explores whether the expenditure-switching role of exchange rates has changed in the current episode of significant global imbalances. -
June 20, 2010
The Bank of Canada’s Extraordinary Liquidity Policies and Moral Hazard
Bank of Canada published a report establishing a set of principles to guide the extraordinary liquidity interventions it was making in response to the systemic shocks buffeting the Canadian financial system. These principles provided a framework for maintaining consistency between the Bank’s actions and its responsibilities as lender of last resort to the financial system, while allowing sufficient fl exibility to respond to the unique challenges of the crisis. -
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June 20, 2010
Financial System Review - June 2010
Risks to the stability of both the Canadian and the global financial systems appeared to be diminishing for most of the period since the last Financial System Review (FSR), as the recovery in financial conditions and the macroeconomic environment continued to solidify. -
June 18, 2010
Fortune Favours the Bold
From the end of 2008 to the middle of last year, Canada experienced a short, sharp recession. With the exception of government spending, all major components of aggregate demand declined, and industrial production dropped 15 per cent. -
Inflation and Unemployment in Competitive Search Equilibrium
Using a monetary search model, Rocheteau, Rupert and Wright (2007) show that the relationship between inflation and unemployment can be positive or negative depending on the primitives of the model. The key features are indivisible labor, nonseparable preferences and bargaining.