August 15, 2001
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2334
result(s)
Predetermined Prices and the Persistent Effects of Money on Output
Staff Working Paper 2001-13
Michael Devereux,
James Yetman
This paper illustrates a model of predetermined pricing, where firms set a fixed schedule of nominal prices at the time of price readjustment, based on the work of Fischer (1977). This type of price-setting specification cannot produce any excess persistence in a fixed-duration model of staggered prices, but we show that with a probabilistic model of price adjustment, as in Calvo (1983), a predetermined pricing specification can produce excess persistence.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Monetary policy transmission
JEL Code(s):
E,
E3,
E30
Evaluating Linear and Non-Linear Time-Varying Forecast-Combination Methods
Staff Working Paper 2001-12
Fuchun Li,
Greg Tkacz
This paper evaluates linear and non-linear forecast-combination methods. Among the non-linear methods, we propose a nonparametric kernel-regression weighting approach that allows maximum flexibility of the weighting parameters.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods
JEL Code(s):
C,
C1,
C14,
C5,
C53,
E,
E2,
E27
Gaining Credibility for Inflation Targets
Staff Working Paper 2001-11
James Yetman
In this paper, I consider a simple model in which agents learn about the inflation target of a central bank over time by observing the policy instrument or inflation outcomes. Measuring credibility as the distance between the perceived target and the actual target, an increase in credibility is beneficial to the central bank because it brings the policy consistent with attaining the inflation target closer to that required to attain the output target.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Credibility,
Inflation targets
JEL Code(s):
E,
E5,
E52
The Future Prospects for National Financial Markets and Trading Centres
Staff Working Paper 2001-10
Charles Gaa,
Stephen Lumpkin,
Robert Ogrodnick,
Peter Thurlow
This paper investigates the effects of the continuation of globalization and technological developments on the future of national-level financial markets and trading centres, particularly in smaller countries such as Canada. We foresee the development of a single global market in the most-liquid assets based on equity-market linkages.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial markets
JEL Code(s):
G,
G1,
G10
Testing for a Structural Break in the Volatility of Real GDP Growth in Canada
Staff Working Paper 2001-9
Alexandre Debs
This study tests for a structural break in the volatility of real GDP growth in Canada following the methodology of McConnell and Quiros (1998). A break is found in the first quarter of 1991.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Econometric and statistical methods
JEL Code(s):
C,
C1,
C12,
E,
E3,
E32
May 17, 2001
Reforming the International Financial System
This article examines the efforts of the major advanced countries to strengthen the international financial system in order to avoid financial crises such as those that occurred in emerging-market economies in the 1990s. These efforts have focused on crisis prevention and crisis management. The prevention of such crises has necessitated the formation of new international groups that include emerging markets in their membership. Measures have also been taken to reduce the vulnerability of countries to such crises. These measures have centered on the need for appropriate macroeconomic policies, including the need for sustainable exchange rate regimes, sound domestic financial systems, and prudent risk management. In the area of crisis management, the International Monetary Fund (IMF) has been given access to additional resources for lending to countries that experience financial crises. The IMF has also established new lending facilities for use in such circumstances. It has also been agreed that the private sector will need to play a greater role in the management of such crises in the future.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Exchange rate regimes,
International topics
May 16, 2001
Core Principles for Systemically Important Payments Systems and Their Application in Canada
Systemically important payments systems are systems that, because of the size or the nature of the payments they process, could trigger or transmit serious shocks across domestic or international financial systems if they were insufficiently protected against risk. This article describes the overall framework of core principles developed for the design, operation, and oversight of such payments systems. The article reviews the role of the task force established to develop the core principles and examines the core principles themselves. It also examines the role of central banks in overseeing major payments systems and in applying the core principles to them. The focus is on the Bank of Canada's oversight responsibilities under the Payment Clearing and Settlement Act and on Canada's systemically important payments system—the LVTS.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Payment clearing and settlement systems
May 15, 2001
www.bankofcanada.ca—The Bank on the World Wide Web
This article by the Bank's Web master details the development of the Bank's Web site and highlights some of its special features. It includes a description of dataBANK, a custom-built interface to the Bank's economic databases that gives visitors access to 220 data series. It also provides a mini tour of monetary policy material "on site," as well as a taste of things to come. Above all, this article invites you to come and visit our site.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
International topics
How Rigid Are Nominal-Wage Rates?
Staff Working Paper 2001-8
Allan Crawford
This study examines the effect of nominal-wage rigidities on wage growth in Canada using a hazard model and micro data for union contracts. The hazard model is specified in a way that allows considerable flexibility in the shape of the estimated notional wage-change distribution.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Labour markets
JEL Code(s):
E,
E2,
E24,
E5,
E52,
E6,
E61