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279
result(s)
Inflation, Nominal Portfolios, and Wealth Redistribution in Canada
Staff Working Paper 2008-19
Césaire Meh,
Yaz Terajima
There is currently a policy debate on potential refinements to monetary policy regimes in countries with low and stable inflation such as the U.S. and Canada. For example, in Canada, a systematic review of the current inflation targeting framework is underway.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Inflation targets,
Inflation: costs and benefits,
Monetary policy framework,
Sectoral balance sheet
JEL Code(s):
D,
D3,
D31,
D5,
D58,
E,
E3,
E31,
E5,
E50
Uncertainty, Inflation, and Welfare
Staff Working Paper 2008-13
Jonathan Chiu,
Miguel Molico
This paper studies the welfare costs and the redistributive effects of inflation in the presence of idiosyncratic liquidity risk, in a micro-founded search-theoretical monetary model. We calibrate the model to match the empirical aggregate money demand and the distribution of money holdings across households, and study the effects of inflation under the implied degree of market incompleteness.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation: costs and benefits,
Monetary policy framework
JEL Code(s):
E,
E4,
E40,
E5,
E50
Inflation Targeting and Price-Level-Path Targeting in the GEM: Some Open Economy Considerations
Staff Working Paper 2008-6
Donald Coletti,
René Lalonde,
Dirk Muir
This paper compares the performance of simple inflation targeting (IT) and price-level path targeting (PLPT) rules to stabilize the macroeconomy, in response to a series of shocks, similar to those seen in Canada and the United States over the 1983 to 2004 period.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Inflation and prices,
Inflation: costs and benefits,
Monetary policy framework
JEL Code(s):
C,
C5,
C51,
C52,
E,
E1,
E17,
E3,
E31,
E5,
E52
December 14, 2007
The Costs of Inflation in New Keynesian Models
Ambler describes three new channels through which inflation affects economic welfare in New Keynesian models. These channels were absent from traditional analyses and may have caused researchers to underestimate the costs associated with variable inflation, even at relatively low levels of inflation. The article concludes with a preliminary assessment of the quantitative importance of the new channels and their significance for monetary policy.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation: costs and benefits,
Monetary policy framework
December 13, 2007
Central Bank Performance under Inflation Targeting
Gosselin examines and reports on the various factors that contribute to successful inflation targeting. Using a panel of 21 inflation-targeting countries over the period 1990Q1-2007Q2, Gosselin finds that the ability of central banks to hit their targets varies considerably. Some of these differences can be explained by exchange rate fluctuations, fiscal deficits, and differences in financial development. Others are explained by differences in the targeting framework itself and the manner in which it is implemented.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Central bank research,
Inflation targets,
Monetary policy framework
December 11, 2007
The Zero Bound on Nominal Interest Rates: Implications for Monetary Policy
One of the most important factors that must be considered if countries are thinking about lowering the target level of inflation much below 2 per cent is the zero interest bound. Targeting inflation rates that are too low, the authors note, may restrict the ability of monetary policy to respond to economic shocks by limiting the amount by which interest rates can be eased.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation: costs and benefits,
Interest rates,
Monetary policy implementation
December 10, 2007
Inflation Targeting, Price-Level Targeting, and Fluctuations in Canada's Terms of Trade
Coletti and Lalonde compare inflation targeting and price-level targeting in the context of a small open economy subject to sizable terms-of-trade shocks. The authors summarize recent research that compares the ability of price-level targeting and inflation targeting to stabilize the macroeconomy when confronted with shocks similar to those experienced by Canada in recent years. Their preliminary results suggest that price-level targeting may represent a feasible alternative to traditional inflation targeting. Their article also provides insight into the direction of current research in this area at the Bank.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Central bank research,
Inflation and prices,
Monetary policy framework
October 14, 2007
The Effect of China on Global Prices
The dramatic growth in China's exports of consumer goods such as clothing, toys, and electronics, and imports of primary commodities such as oil and metals is having major effects on global supply and demand. In examining China's role in global relative price changes, Francis finds that downward pressure on the relative prices of consumer goods is likely to persist as China's large labour supply continues its migration into manufacturing. Likewise, China's size and growth will also remain key drivers of global commodities demand for some time. Despite these forces, inflation-targeting central banks have the tools to keep inflation close to target, thus offsetting any persistent upward or downward inflationary pressure.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
International topics,
Recent economic and financial developments
The Direct Effect of China on Canadian Consumer Prices: An Empirical Assessment
Staff Discussion Paper 2007-10
Louis Morel
The author investigates the direct effect of Chinese imported goods on consumer prices in Canada. On average, over the 2001–06 period, the direct effect of consumer goods imported from China is estimated to have reduced the inflation rate by about 0.1 percentage points per year. This disinflationary effect is due to two causes: first, the […]
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Inflation and prices
JEL Code(s):
E,
E3,
E31