August 14, 1998
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768
result(s)
August 13, 1998
Labour force participation in Canada: Trends and shifts
A key determinant of the potential growth of an economy is the rate at which the labour force increases, which depends both on population growth and on changes in the participation rate. Cyclical factors related to the economic environment can play a significant role in affecting the participation rate, as can structural factors and demographic trends. From the mid-1970s to the end of the 1980s, the participation rate rose almost without interruption to a record high of 67.5 per cent. In contrast, between 1990 and 1995, it declined sharply and has been relatively steady at around 65 per cent since 1995. In this article, the author analyzes the participation rate of age and gender groupings in order to better understand the factors leading to these developments and their implications for future movements in the aggregate rate. While cyclical factors contributed to the decline in the participation rate in the 1990s, structural factors (such as an increase in school attendance rates and the increasing use of computer technology) and demographic trends (the aging of the population) have had a substantial impact. The conclusion reached is that, while some recovery is to be expected, the aggregate participation rate is unlikely to return to its 1989 peak over the next decade or so.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Labour markets
Le PIB potentiel des États-Unis et ses déterminants : la productivité de la main-d'oeuvre et le taux d'activité
Staff Working Paper 1998-13
René Lalonde
This study has three main objectives: first, to determine whether the good performance of the U.S. economy observed in recent years is attributable to an upsurge in potential GDP; second, to identify the variables related to aggregate supply, whose trend might explain the evolution in economic potential; finally, to observe whether, despite everything, the American […]
Content Type(s):
Staff research,
Staff working papers
May 14, 1998
Recent developments in the monetary aggregates and their implications
This article examines the developments in the monetary aggregates over the course of 1997 and their implications for future economic activity. The narrow aggregate, M1, grew rapidly in the first half of 1997 but slowed somewhat during the second half of the year. Much of the strong growth in this aggregate over the last several years has been associated with a higher demand for transactions balances as interest rates declined and economic activity revived. There were some special factors at play, however, that are discussed in the article. The Bank expects some slowing in M1 growth through 1998 and into 1999. This would be consistent with a trend of inflation within the inflation-control target range of 1 to 3 per cent over the next couple of years. Growth in the broad aggregate, M2+, continued to be distorted by the shift of savings out of fixed-term deposits into mutual funds. A broader aggregate that includes M2+, CSBs, and all mutual funds and thus provides a better estimate of broad money growth, grew at a moderate pace during 1997. The recent behaviour of the broad monetary aggregates continues to suggest that inflation will remain low in coming years.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Monetary aggregates
Forecasting Inflation with the M1-VECM: Part Two
Staff Working Paper 1998-6
Walter Engert,
Scott Hendry
A central bank's main concern is the general direction of future inflation, and not transitory fluctuations of the inflation rate. As a result, this paper is concerned with forecasting a simple measure of the trend of inflation, the eight-quarter CPI-inflation rate. The primary objective is to improve the M1-based vector-error-correction model (VECM) developed by Hendry […]
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Inflation and prices,
Monetary aggregates
JEL Code(s):
C,
C3,
C5,
E,
E3,
E4,
E5
Predicting Canadian Recessions Using Financial Variables: A Probit Approach
Staff Working Paper 1998-5
Joseph Atta-Mensah,
Greg Tkacz
This paper examines the ability of a number of financial variables to predict Canadian recessions. Regarding methodology, we follow closely the technique employed by Estrella and Mishkin (1998), who use a probit model to predict U.S. recessions up to eight quarters in advance. Our main finding is that the spread between the yield on Canadian […]
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Interest rates
JEL Code(s):
E,
E3,
E32,
E4,
E43
The Benefits of Low Inflation: Taking Stock
Technical Report No. 83
Brian O'Reilly
This paper surveys the empirical literature on the benefits of low inflation, emphasizing contributions since 1990. It follows the framework of a section in the Bank's 1990 Annual Report, "The benefits of price stability."
Content Type(s):
Staff research,
Technical reports
Topic(s):
Inflation: costs and benefits
JEL Code(s):
E,
E3
Food Aid Delivery, Food Security and Aggregate Welfare in a Small Open Economy: Theory and Evidence
Staff Working Paper 1998-1
Patrick Osakwe
A small-open-economy model is developed to examine how the method of food aid disbursement affects labor employment, food security and aggregate welfare, in recipient countries, in an environment in which private sector firms pay efficiency wages to induce effort. Two forms of food aid delivery are considered: first is project food aid, under which food […]
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Development economics
JEL Code(s):
J,
J4,
O,
O1,
Q,
Q1
December 14, 1997
Recent economic and financial developments
The Canadian economy expanded at an average rate of over 4 per cent through the second half of 1996 and the first three quarters of 1997. The expansion was supported by accommodative monetary conditions, substantial employment gains, low inflation, an improved fiscal postion, and strong U.S. demand. These factors will continue to underpin a scenario of sustained growth in output and employment in the period ahead. With the situation in Asia still evolving, it is difficult to be precise about the size of its overall impact on Canada. At the same time, there have been some positive developments including stronger-than-anticipated economic performance in the United States, Mexico, and Europe and declining longer-term interest rates in most industrial countries. The core rate of inflation slipped slightly below the 1 to 3 per cent target range in the closing months of 1997. With the unwinding of some of the special factors that contributed to the decline, trend inflation is expected to move back inside the range in coming months.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Recent economic and financial developments
December 11, 1997
Price stability, inflation targets, and monetary policy: Conference summary
This article summarizes the proceedings of a conference hosted by the Bank of Canada in May 1997. The first conference held by the Bank on this subject was in 1993, two years after the introduction of inflation targeting in Canada. The 1997 conference revisited many of the analytic issues related to price stability that had been examined at the first conference, while also considering several additional questions. This time, with the extension of inflation-control targets beyond 1998 under consideration, particular emphasis was placed on the role and design of those targets. The conference also featured a round-table discussion among practitioners of monetary policy in three inflation-targeting countries—New Zealand, Sweden, and the United Kingdom. Their remarks, which focussed on the experience with inflation targets, bring out very clearly the common challenges facing monetary policymakers in open economies.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Monetary policy framework