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768
result(s)
An Empirical Analysis of Dynamic Interrelationships Among Inflation, Inflation Uncertainty, Relative Price Dispersion, and Output Growth
Staff Working Paper 2002-39
Francis Vitek
Within a unified framework, the author conducts an empirical investigation of dynamic interrelationships among inflation, inflation uncertainty, relative price dispersion, and output growth.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices
JEL Code(s):
E,
E3,
E31
Oil-Price Shocks and Retail Energy Prices in Canada
Staff Working Paper 2002-38
Marwan Chacra
The effects of global energy-price shocks on retail energy prices in Canada are examined. More specifically, the author looks at the response of the consumer price indexes for gasoline, heating oil, natural gas, and electricity in Canada to movements in world crude oil prices.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Inflation and prices,
Market structure and pricing
JEL Code(s):
C,
C2,
C22,
C5,
C51,
C53,
Q,
Q4,
Q40
November 19, 2002
Purchasing-Power Parity: Definition, Measurement, and Interpretation
This article examines the concept of purchasing-power parity (PPP) and its implications for the equilibrium value of the Canadian exchange rate. PPP has two main applications, as a theory of exchange rate determination and as a means to compare living standards across countries. Concerning exchange rate determination, PPP is mainly useful as a reminder that monetary policy has no long-run impact on the real exchange rate, since the exchange rate can deviate persistently from its PPP value in response to real shocks. To compare living standards across countries, PPP exchange rates constructed by comparing the prices of national consumption baskets are used to translate per capita national incomes into a common currency. These rates are useful because they offset differences in national price levels to obtain comparable measures of purchasing power, but they are not an accurate measure of the equilibrium value of the exchange rate. The authors conclude that the current deviation of the Canadian exchange rate from the PPP rate does not imply that the exchange rate is undervalued, but that this deviation reflects the impact of persistent real factors, in particular, lower commodity prices.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Exchange rates
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
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
Dollarization in Canada: The Buck Stops There
Technical Report No. 90
John Murray,
James Powell
The sharp depreciation of the Canadian dollar and the successful launch of the euro have spawned an animated debate in Canada concerning the potential benefits of formally adopting the U.S. dollar as our national currency.
Content Type(s):
Staff research,
Technical reports
Topic(s):
Exchange rate regimes
JEL Code(s):
E,
E3,
E32,
F,
F3,
F33,
F36
Estimated DGE Models and Forecasting Accuracy: A Preliminary Investigation with Canadian Data
Staff Working Paper 2002-18
Kevin Moran,
Veronika Dolar
This paper applies the hybrid dynamic general-equilibrium, vector autoregressive (DGE-VAR) model developed by Ireland (1999) to Canadian time series.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models
JEL Code(s):
E,
E3,
E32,
E37