René Lalonde - Latest

• May 17, 2012

  On the Adjustment of the Global Economy

  Bank of Canada Review - Spring 2012 Carlos De Resende, Claudia Godbout, René Lalonde, Eric Morin, Nikita Perevalov

  This article discusses three scenarios for the adjustment of the global economy. In a “baseline” scenario—which encompasses fiscal consolidation in major advanced economies, growth-friendly structural reforms in Europe and Japan, and greater exchange rate flexibility and reforms in the emerging-market economies of Asia to induce rotation of demand away from net exports—global current account imbalances […]

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Balance of payments and components, Exchange rates, Fiscal policy, International topics, Recent economic and financial developments JEL Code(s): F, F3, F32, F37, F4, F42
• August 18, 2011

  The BoC-GEM-Fin: Banking in the Global Economy

  Bank of Canada Review - Summer 2011 Carlos De Resende, René Lalonde

  This article describes the Bank of Canada’s version of the Global Economy Model structured to incorporate an active banking system that features an interbank market and cross-border lending. After describing the new model, the authors use it to examine the responses of selected U.S. and Canadian macroeconomic variables to a “credit crunch” in the United States and also to study the impact of changes in the regulatory limits to bank leverage in Canada. They also discuss the relative merits of a monetary policy framework based on inflation targeting and one based on price-level targeting in the presence of shocks to the U.S. and Canadian banking sectors.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Economic models, Financial institutions, Financial system regulation and policies, Monetary policy framework
• June 11, 2009

  BoC-GEM: Modelling the World Economy

  Bank of Canada Review - Summer 2009 René Lalonde, Dirk Muir

  BoC-GEM, an adaptation of the Global Economy Model, initially developed at the International Monetary Fund and the New York Federal Reserve, is a very useful tool to tackle a broad range of issues pertinent to the current economic context, such as the recent movements in commodity prices and the adjustment of global imbalances. This article describes the structure and functioning of BoC-GEM and details some examples of recent application in the areas of monetary policy and issues in the real economy and questions of financial stability and describes ongoing research into introducing a financial sector into the model.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Economic models, International topics
• December 10, 2007

  Inflation Targeting, Price-Level Targeting, and Fluctuations in Canada's Terms of Trade

  Bank of Canada Review - Winter 2007-2008 Donald Coletti, René Lalonde

  Coletti and Lalonde compare inflation targeting and price-level targeting in the context of a small open economy subject to sizable terms-of-trade shocks. The authors summarize recent research that compares the ability of price-level targeting and inflation targeting to stabilize the macroeconomy when confronted with shocks similar to those experienced by Canada in recent years. Their preliminary results suggest that price-level targeting may represent a feasible alternative to traditional inflation targeting. Their article also provides insight into the direction of current research in this area at the Bank.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Central bank research, Inflation and prices, Monetary policy framework
• October 20, 2006

  MUSE: The Bank of Canada's New Projection Model of the U.S. Economy

  Bank of Canada Review - Autumn 2006 Marc-André Gosselin, René Lalonde, Nicolas Parent

  Staff 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.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Econometric and statistical methods, Economic models, International topics