Christopher Ragan - Latest

• December 20, 2006

  Why Monetary Policy Matters: A Canadian Perspective

  Bank of Canada Review - Winter 2006-2007 Christopher Ragan

  This article provides answers to several key questions about Canadian monetary policy. First, what is monetary policy? Second, why does the Bank of Canada focus on the control of inflation rather than other macroeconomic variables? Third, how do the Bank's actions influence the rate of inflation? And, finally, how can monetary policy deliver genuine and significant benefits to society?

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Business fluctuations and cycles, Inflation: costs and benefits, Monetary policy framework
• October 5, 2005

  The Exchange Rate and Canadian Inflation Targeting

  Bank of Canada Review - Autumn 2005 Christopher Ragan

  An essential element of the Bank of Canada's inflation-targeting framework is a floating exchange rate that is free to adjust in response to shocks that affect the Canadian and world economies. This floating rate plays an important role in the transmission mechanism for monetary policy. A practical question is how the Bank of Canada incorporates currency movements into the monetary policy decision-making process. Only after determining the cause and persistence of exchange rate change, and its likely net effect on aggregate demand, can the Bank decide on the appropriate policy response to keep inflation low, stable, and predictable. Ragan reviews the need to target inflation and the transmission mechanism for monetary policy, including the role of the exchange rate, before describing two types of exchange rate movements and their implications for monetary policy.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Exchange rates, Inflation targets, Monetary policy implementation