E3 - Prices, Business Fluctuations, and Cycles

• Wage and Price Dynamics in Canada

  Technical Report No. 56 Barry Cozier

  This paper examines wage and price dynamics in Canada with a view towards testing the implications of a wage-price dynamics, according to which unit labour costs are determined by a wage Phillips curve while prices are set as a markup over unit labour costs. This model is compared to an alternative model in which excess […]

  Content Type(s): Staff research, Technical reports Topic(s): Inflation and prices JEL Code(s): C, C5, C51, C52, E, E2, E24, E3, E31

• Some Evidence on Hysteresis and the Costs of Disinflation in Canada

  Technical Report No. 55 Barry Cozier, Gordon Wilkinson

  This paper addresses the following questions: How large are the output costs of disinflation in Canada? Are these costs temporary, as predicted by natural-rate models, or are they permanent, as predicted by hysteresis models? Are the costs of disinflation higher at lower rates of inflation? Are they higher when the economy is at or below […]

  Content Type(s): Staff research, Technical reports Topic(s): Labour markets JEL Code(s): E, E2, E24, E3, E31

• The Goal of Price Stability: A Review of the Issues

  Technical Report No. 54 Jack Selody

  The basic responsibility of a central bank is to preserve the value of money—that is, to maintain stability in the general level of prices. This report pulls together the main arguments for and against price stability as the appropriate goal for monetary policy. The available evidence suggests that the benefits of price stability are many […]

  Content Type(s): Staff research, Technical reports Topic(s): Inflation targets JEL Code(s): E, E3, E31, E5, E50

• The Inflation-adjusted Rate of Return on Corporate Debt and Equity: 1966-1980

  Technical Report No. 39 Stuart Gilson

  This report has two main objectives: First, to determine whether the real tax rate on investment income has proven sensitive to inflation; second, to determine the extent to which real returns to debt and equity, based on published data, differ from those based on inflation-adjusted data. The scope of the inflationary distortion in corporate income […]

  Content Type(s): Staff research, Technical reports Topic(s): Interest rates JEL Code(s): E, E3, E31, G, G1, G12, G3, G30

• Asset Stocks and the Use of Monetary and Fiscal Policies to Reduce Inflation

  Technical Report No. 35 Paul Masson

  This paper analyzes the dynamic behaviour of a country's economy under different policy regimes, by examining the cyclical effects that occur when certain intermediate macroeconomic targets are adopted. To highlight the differences in the adjustment paths that result, the study deliberately limits policy choice: either money supply or nominal income as targets, and either real […]

  Content Type(s): Staff research, Technical reports Topic(s): Fiscal policy, Inflation and prices, Monetary policy and uncertainty JEL Code(s): E, E3, E31, E6, E63