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2333
result(s)
Nominal Rigidities and Monetary Policy in Canada Since 1981
Staff Working Paper 2002-25
Ali Dib
This paper develops and estimates a dynamic, stochastic, general-equilibrium model with price and wage stickiness to analyze monetary policy in Canada.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E32,
E5,
E52
Financial Structure and Economic Growth: A Non-Technical Survey
Staff Working Paper 2002-24
Veronika Dolar,
Césaire Meh
There is a large body of literature that studies the relationship between financial structure (that is, the degree to which the financial system is either market- or intermediary-based) and long-run economic growth.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Development economics,
Economic models,
Financial institutions,
Financial markets,
Financial services
JEL Code(s):
F,
F3,
F36,
G,
G0,
G00,
G1,
G14,
G2,
G21,
K,
K2,
K22,
O,
O1,
O16
How to Improve Inflation Targeting at the Bank of Canada
Staff Working Paper 2002-23
Nicholas Rowe
This paper shows that if the Bank of Canada is optimally adjusting its monetary policy instrument in response to inflation indicators to target 2 per cent inflation at a two-year horizon, then deviations of inflation from 2 per cent represent the Bank's forecast errors, and should be uncorrelated with its information set, which includes two-year lagged values of the instrument and the indicators. Positive or negative correlations are evidence of systematic errors in monetary policy.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Monetary and financial indicators,
Monetary policy implementation
JEL Code(s):
E,
E5
August 21, 2002
Monetary Policy and Uncertainty
Central banks must cope with considerable uncertainty about what will happen in the economy when formulating monetary policy. This article describes the different types of uncertainty that arise and looks at examples of uncertainty that the Bank has recently encountered. It then reviews the strategies employed by the Bank to deal with this problem. The other articles in this special issue focus on three of these major strategies.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Monetary policy and uncertainty,
Monetary policy framework
August 20, 2002
Information and Analysis for Monetary Policy: Coming to a Decision
This article outlines one of the Bank's key approaches to dealing with the uncertainty that surrounds decisions on monetary policy: the consideration of a wide range of information from a variety of sources. More specifically, it describes the information and analysis that the monetary policy decision-makers—the Governing Council of the Bank of Canada—receive in the two or three weeks leading up to a decision on the setting of the policy rate—the target overnight interest rate. The article also describes how the Governing Council reaches this decision.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Monetary and financial indicators,
Monetary policy framework,
Monetary policy implementation
August 19, 2002
Models in Policy-Making
This article examines another strategy in the Bank's approach to dealing with an uncertain world: the use of carefully articulated models to produce economic forecasts and to examine the implications of the various risks to those forecasts. Economic models are deliberate simplifications of a complex world that allow economists to make predictions that are reasonably accurate and that can be easily understood and communicated. By using several models, based on competing paradigms, the Bank minimizes policy errors that could result from relying on one view of the world and one philosophy of model design. The authors review some of the models currently used at the Bank, as well as the role of judgment in the projection process.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Economic models
August 18, 2002
The Role of Simple Rules in the Conduct of Canadian Monetary Policy
The third strategy employed by the Bank when dealing with uncertainty is the consideration of appropriate simple reaction functions or "rules" for the setting of the policy interest rate. Since John Taylor's presentation of his much-discussed rule, research on simple policy rules has exploded. Simple rules have several advantages. In particular, they are easy to construct and communicate and are believed by some to be robust, in the sense of generating good results in a variety of economic models. This article provides an overview of the recent research regarding the usefulness and robustness of simple monetary policy rules, particularly in models of the Canadian economy. It also describes and explains the role of simple rules in the conduct of monetary policy in Canada.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Monetary policy and uncertainty
The Usefulness of Consumer Confidence Indexes in the United States
Staff Working Paper 2002-22
Brigitte Desroches,
Marc-André Gosselin
This paper assesses the usefulness of consumer confidence indexes in forecasting aggregate consumer spending in the United States.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Domestic demand and components,
Economic models,
International topics
JEL Code(s):
D,
D1,
D12,
E,
E2,
E21,
E27
Entrepreneurial Risk, Credit Constraints, and the Corporate Income Tax: A Quantitative Exploration
Staff Working Paper 2002-21
Césaire Meh
This paper describes the positive effect that corporate income tax has on capital formation in the presence of liquidity constraints and uninsurable risk.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Fiscal policy
JEL Code(s):
D,
D3,
D31,
E,
E6,
E62,
H,
H2,
H20,
H23