September 15, 2008
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2333
result(s)
September 15, 2008
Adjusting to the Commodity-Price Boom: The Experiences of Four Industrialized Countries
Between 2002 and 2008, global commodity prices rose to unprecedented levels. This article examines the process of adjustment to the commodity boom in four industrialized, commodity-exporting countries (Australia, Canada, New Zealand, and Norway). The article focuses on both the direct adjustment within the commodity-producing sectors (via increased employment and capital spending) and the indirect adjustment in the macro economy. The analysis finds that the indirect adjustment process, which was triggered by the increase in incomes that the commodity-price boom generated, has been the most important part of the adjustment in all four economies. Through this channel, aggregate demand rose, exchange rates appreciated, and adjustment was facilitated in other sectors, such as manufacturing and construction.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
International topics,
Recent economic and financial developments
September 15, 2008
The Effects of Recent Relative Price Movements on the Canadian Economy
Although the standard of living of Canadians has improved as a result of terms-of-trade gains created by the sharp rise in real commodity prices over the past five years or so, the commodity-price increase, combined with an exchange rate appreciation and real income gain, triggered structural adjustments by altering underlying economic incentives. The frictions generated in adjusting to the relative price shock have likely contributed to hold back aggregate productivity growth. Dupuis and Marcil examine the structural adjustments that have been required-in particular, the resource reallocation among the different sectors of the economy-and its effects on employment, output, and productivity, as well as the responses of final domestic demand and external trade flows.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Productivity,
Recent economic and financial developments
September 15, 2008
The Bank of Canada's Senior Loan Officer Survey
The Bank of Canada maintains regular contact with financial institutions as part of the information-gathering process that feeds into the larger set of information used to arrive at its monetary policy decision. Since 1999, the Bank has been conducting a quarterly survey of the business-lending practices of major Canadian financial institutions. Analysis of the information collected shows that it is correlated with future growth in both credit and business investment. This article focuses on how the survey is conducted and describes the construction of the summary statistics, highlighting the key statistical relationships in the historical survey data.Aggregate and Welfare Effects of Redistribution of Wealth Under Inflation and Price-Level Targeting
Staff Working Paper 2008-31
Césaire Meh,
José-Víctor Ríos-Rull,
Yaz Terajima
Since the work of Doepke and Schneider (2006a) and Meh and Terajima (2008), we know that inflation causes major redistribution of wealth – between households and the government, between nationals and foreigners, and between households within the same country.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Inflation and prices,
Inflation targets,
Inflation: costs and benefits,
Monetary policy framework,
Sectoral balance sheet
JEL Code(s):
D,
D3,
D31,
E,
E2,
E21,
E3,
E31,
E4,
E44,
E5,
E52,
E6,
E63
Non-Linearities, Model Uncertainty, and Macro Stress Testing
Staff Working Paper 2008-30
Miroslav Misina,
David Tessier
A distinguishing feature of macro stress testing exercises is the use of macroeconomic models in scenario design and implementation. It is widely agreed that scenarios should be based on "rare but plausible" events that have either resulted in vulnerabilities in the past or could do so in the future.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial stability
JEL Code(s):
C,
C1,
C15,
G,
G2,
G21,
G3,
G33
Macroeconomic Determinants of the Term Structure of Corporate Spreads
Staff Working Paper 2008-29
Jun Yang
We investigate the macroeconomic determinants of corporate spreads using a no-arbitrage technique. Structural shocks are identified by a New-Keynesian model. Treasury bonds are priced in an affine model with time-varying risk premia.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Debt management,
Financial markets,
Interest rates
JEL Code(s):
E,
E4,
E43,
E44,
G,
G1,
G12
The Welfare Implications of Fiscal Dominance
Staff Working Paper 2008-28
Carlos De Resende,
Nooman Rebei
This paper studies the interdependence between fiscal and monetary policy in a DSGE model with sticky prices and non-zero trend inflation. We characterize the fiscal and monetary policies by a rule whereby a given fraction k of the government debt must be backed by the discounted value of current and future primary surpluses.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Fiscal policy,
Inflation: costs and benefits,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E4,
E42,
E5,
E50,
E6,
E63
Are Bygones not Bygones? Modeling Price Level Targeting with an Escape Clause and Lessons from the Gold Standard
Staff Working Paper 2008-27
Paul Masson,
Malik Shukayev
Like the gold standard, price level targeting (PT) involves not letting past deviations of inflation be bygones; both regimes return the price level (or price of gold) to its target. The experience of suspension of the gold standard in World War I, resumption in the 1920s (for some countries at a different parity), and final abandonment is reviewed.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Credibility,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E5,
E52
Merchant Acceptance, Costs, and Perceptions of Retail Payments: A Canadian Survey
Staff Discussion Paper 2008-12
Carlos Arango,
Varya Taylor
Using the results of a survey on accepted means of payment, the authors examine merchant preferences and perceptions of retail payment reliability, risk, and costs; the share of each type of payment method over total sales; and the costs involved in accepting payments.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Bank notes
JEL Code(s):
E,
E4,
E41,
L,
L2