E - Macroeconomics and Monetary Economics

• Cyclical Behavior of Debt and Equity Using a Panel of Canadian Firms

  Staff Working Paper 2007-44 Francisco Covas, Wouter den Haan

  We document the cyclical behavior of debt, equity, and retained earnings for different firm categories using firm-level Canadian data.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles JEL Code(s): E, E3, E32, G, G3, G32

• Trend Inflation, Wage and Price Rigidities, and Welfare

  Staff Working Paper 2007-42 Robert Amano, Kevin Moran, Stephen Murchison, Andrew Rennison

  This paper studies the steady-state costs of inflation in a general-equilibrium model with real per capita output growth and staggered nominal price and wage contracts.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation: costs and benefits JEL Code(s): E, E0, E5

• Asset-Price Misalignments and Monetary Policy: How Flexible Should Inflation-Targeting Regimes Be?

  Staff Discussion Paper 2007-6 Jack Selody, Carolyn A. Wilkins

  The authors analyze the extent to which inflation-targeting frameworks should incorporate flexibility in order to respond to asset-price misalignments and other atypical events. They examine the costs and benefits of adding flexibility to the Bank's current inflation-targeting framework, and conclude that maintaining low and stable consumer price inflation is the best contribution that monetary policy […]

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Inflation targets, Monetary policy framework JEL Code(s): E, E5, E6

• Liquidity, Redistribution, and the Welfare Cost of Inflation

  Staff Working Paper 2007-39 Jonathan Chiu, Miguel Molico

  This paper studies the long run welfare costs of inflation in a micro-founded model with trading frictions and costly liquidity management.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation: costs and benefits JEL Code(s): E, E4, E40, E5, E50

• The Canadian Business Cycle: A Comparison of Models

  Staff Working Paper 2007-38 Frédérick Demers, Ryan Macdonald

  This paper examines the ability of linear and nonlinear models to replicate features of real Canadian GDP. We evaluate the models using various business-cycle metrics.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods JEL Code(s): C, C3, C32, E, E3, E37

• Unanticipated Defaults and Losses in Canada's Large-Value Payments System, Revisited

  Staff Discussion Paper 2007-5 Devin Ball, Walter Engert

  Recent work at the Bank of Canada studied the impact of default in Canada’s large-value payments system, and concluded that participants could readily manage their potential losses (McVanel 2005). In an extension of that work, the authors use a much larger set of daily payments data – with three times as many observations – to […]

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions, Payment clearing and settlement systems JEL Code(s): E, E4, E44, E47, G, G2, G21

• Cross-Country Estimates of the Degree of Fiscal Dominance and Central Bank Independence

  Staff Working Paper 2007-36 Carlos De Resende

  This paper studies the interdependence between fiscal and monetary policies, and their joint role in the determination of the price level.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Fiscal policy, Inflation: costs and benefits JEL Code(s): E, E3, E31, E4, E42, E5, E50, E6, E63

• Gold Prices and Inflation

  Staff Working Paper 2007-35 Greg Tkacz

  Using data for 14 countries over the 1994 to 2005 period, we assess the leading indicator properties of gold at horizons ranging from 6 to 24 months.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates, Inflation and prices JEL Code(s): E, E3, E31, E4, E44

• Should Central Banks Adjust Their Target Horizons in Response to House-Price Bubbles?

  Staff Discussion Paper 2007-4 Meenakshi Basant Roi, Rhys R. Mendes

  The authors investigate the implications of house-price bubbles for the optimal inflation-target horizon using a dynamic general-equilibrium model with credit frictions, house-price bubbles, and small open-economy features. They find that, given the distribution of shocks and inflation persistence over the past 25 years, the optimal target horizon for Canada tends to be at the lower […]

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Central bank research, Credit and credit aggregates, Economic models, Inflation targets, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E4, E42, E44, E5, E52, E58, E6, E61

• Implications of New Accounting Standards for the Bank of Canada's Balance Sheet

  Staff Discussion Paper 2007-2 Mark Zelmer, Grahame Johnson

  The Canadian Institute of Chartered Accountants (CICA) has implemented new accounting standards for the valuation and reporting of financial instruments. They are effective for the Bank of Canada in 2007. As a result of these changes, the Bank has begun valuing its holdings of Government of Canada treasury bills on a fair value basis and […]

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions, Monetary policy framework JEL Code(s): E, E5, E58, M, M4