E52 - Monetary Policy
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Monetary Policy in Estimated Models of Small Open and Closed Economies
The author develops and estimates a quantitative dynamic-optimizing model of a small open economy (SOE) with domestic and import price stickiness and capital-adjustment costs. A monetary policy rule allows the central bank to systematically manage the short-term nominal interest rate in response to deviations of inflation, output, and money growth from their steadystate levels. -
Some Notes on Monetary Policy Rules with Uncertainty
The author explores the role that Taylor-type rules can play in monetary policy, given the degree of uncertainty in the economy. The optimal rule is derived from a simple infinite-horizon model of the monetary transmission mechanism, with only additive uncertainty. -
A Comparison of Twelve Macroeconomic Models of the Canadian Economy
In this report, the authors examine and compare twelve private and public sector models of the Canadian economy with respect to their paradigm, structure, and dynamic properties. These open-economy models can be grouped into two economic paradigms. -
Money in the Bank (of Canada)
With the demise of monetary targeting over the past 20 years in many major countries, the question has arisen as to whether central banks should look at money at all when formulating and conducting monetary policy. -
The Performance and Robustness of Simple Monetary Policy Rules in Models of the Canadian Economy
In this report, we evaluate several simple monetary policy rules in twelve private and public sector models of the Canadian economy. Our results indicate that none of the simple policy rules we examined is robust to model uncertainty, in that no single rule performs well in all models. -
Alternative Public Spending Rules and Output Volatility
One of the central lessons learned from the Great Depression was that adjusting government spending each year to balance the budget increases the volatility of output. -
Inflation Expectations and Learning about Monetary Policy
Various measures indicate that inflation expectations evolve sluggishly relative to actual inflation. In addition, they often fail conventional tests of unbiasedness. -
Nominal Rigidities and Monetary Policy in Canada Since 1981
This paper develops and estimates a dynamic, stochastic, general-equilibrium model with price and wage stickiness to analyze monetary policy in Canada. -
Currency Fluctuations, Liability Dollarization, and the Choice of Exchange Rate Regimes in Emerging Markets
Traditional models of exchange rate regimes ignore the destabilizing effects of sharp and unanticipated exchange rate movements.