E58 - Central Banks and Their Policies

• Alternative Public Spending Rules and Output Volatility

  Staff Working Paper 2002-37 Jean-Paul Lam, William Scarth

  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.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Fiscal policy, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E62

• Inflation Expectations and Learning about Monetary Policy

  Staff Working Paper 2002-30 David Andolfatto, Scott Hendry, Kevin Moran

  Various measures indicate that inflation expectations evolve sluggishly relative to actual inflation. In addition, they often fail conventional tests of unbiasedness.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): E, E4, E47, E5, E52, E58

• On Inflation and the Persistence of Shocks to Output

  Staff Working Paper 2001-22 Maral Kichian, Richard Luger

  This paper empirically investigates the possibility that the effects of shocks to output depend on the level of inflation. The analysis extends Elwood's (1998) framework by incorporating in the model an inflation-threshold process that can potentially influence the stochastic properties of output.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Inflation: costs and benefits JEL Code(s): E, E3, E31, E32, E5, E52, E58

• The Zero Bound on Nominal Interest Rates: How Important Is It?

  Staff Working Paper 2001-6 David Amirault, Brian O'Reilly

  This paper surveys the literature on the zero bound on the nominal interest rate. It addresses questions ranging from the conditions under which the zero bound on the nominal interest rate might occur to policy options to avoid or use to exit from such a situation. We discuss literature that examines historical and country evidence, and literature that uses models to generate evidence on this question.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Credibility, Inflation targets, Monetary policy transmission JEL Code(s): E, E3, E31, E5, E52, E58, E6, E61

• Probing Potential Output: Monetary Policy, Credibility, and Optimal Learning under Uncertainty

  Staff Working Paper 2000-10 James Yetman

  The effective conduct of monetary policy is complicated by uncertainty about the level of potential output, and thus about the size of the monetary policy response that would be sufficient to achieve the targeted inflation rate. One possible response to such uncertainty is for the monetary authority to "probe," interpreted here as actively using its policy response to learn about the level of potential output.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Credibility, Monetary policy and uncertainty, Potential output JEL Code(s): E, E5, E52, E58

• Greater Transparency in Monetary Policy: Impact on Financial Markets

  Technical Report No. 86 Philippe Muller, Mark Zelmer

  Measures have been taken by the Bank of Canada to increase the transparency of Canadian monetary policy. This paper examines whether the greater transparency has improved financial markets' understanding of the conduct of monetary policy.

  Content Type(s): Staff research, Technical reports Research Topic(s): Financial markets, Monetary policy implementation JEL Code(s): E, E5, E52, E58, G, G1, G14

• Constraints on the Conduct of Canadian Monetary Policy in the 1990s: Dealing with Uncertainty in Financial Markets

  Technical Report No. 80 Kevin Clinton, Mark Zelmer

  Canada's economic performance in the first half of the 1990s was adversely affected by high premiums in interest rates that were brought on by political and economic uncertainties.

  Content Type(s): Staff research, Technical reports Research Topic(s): Monetary policy and uncertainty, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E5, E58

• Monetary Shocks in the G-6 Countries: Is There a Puzzle?

  Staff Working Paper 1997-7 Ben Fung, Marcel Kasumovich

  This paper attempts to reduce the uncertainty about the dynamics of the monetary transmission mechanism. Central to this attempt is the identification of monetary policy shocks. Recently, VAR approaches that use over-identifying restrictions have shown success in isolating such shocks.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, International topics, Monetary policy transmission JEL Code(s): E, E5, E52, E58