Staff working papers
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Financial Structure and Economic Growth: A Non-Technical Survey
There is a large body of literature that studies the relationship between financial structure (that is, the degree to which the financial system is either market- or intermediary-based) and long-run economic growth. -
How to Improve Inflation Targeting at the Bank of Canada
This paper shows that if the Bank of Canada is optimally adjusting its monetary policy instrument in response to inflation indicators to target 2 per cent inflation at a two-year horizon, then deviations of inflation from 2 per cent represent the Bank's forecast errors, and should be uncorrelated with its information set, which includes two-year lagged values of the instrument and the indicators. Positive or negative correlations are evidence of systematic errors in monetary policy. -
The Usefulness of Consumer Confidence Indexes in the United States
This paper assesses the usefulness of consumer confidence indexes in forecasting aggregate consumer spending in the United States. -
Entrepreneurial Risk, Credit Constraints, and the Corporate Income Tax: A Quantitative Exploration
This paper describes the positive effect that corporate income tax has on capital formation in the presence of liquidity constraints and uninsurable risk. -
Evaluating the Quarterly Projection Model: A Preliminary Investigation
This paper summarizes the results of recent research evaluating the Bank of Canada's Quarterly Projection Model (QPM). -
Estimates of the Sticky-Information Phillips Curve for the United States, Canada, and the United Kingdom
Mankiw and Reis (2001a) have proposed a "sticky-information"-based Phillips curve (SIPC) to address some of the concerns with the "sticky-price"-based new Keynesian Phillips curve. -
Estimated DGE Models and Forecasting Accuracy: A Preliminary Investigation with Canadian Data
This paper applies the hybrid dynamic general-equilibrium, vector autoregressive (DGE-VAR) model developed by Ireland (1999) to Canadian time series. -
Does Exchange Rate Policy Matter for Growth?
Previous studies on whether the nature of the exchange rate regime influences a country's medium-term growth performance have been based on a tripartite classification scheme that distinguishes between pegged, intermediate, and flexible exchange rate regimes. -
A Market Microstructure Analysis of Foreign Exchange Intervention in Canada
This paper clarifies the role and the impact of foreign exchange dealers in the relationship between foreign exchange intervention and nominal exchange rates using a unique dataset that disaggregates trades by dealer and by type of trade.