292
result(s)
A Comprehensive Evaluation of Measures of Core Inflation in Canada: An Update
Staff Discussion Paper 2019-9
Helen Lao,
Ceciline Steyn
We provide an updated evaluation of the value of various measures of core inflation that could be used in the conduct of monetary policy. We find that the Bank of Canada’s current preferred measures of core inflation—CPI-trim, CPI-median and CPI-common—continue to outperform alternative core measures across a range of criteria.
Content Type(s):
Staff Research,
Staff Discussion Papers
Topic(s):
Inflation and prices,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E5,
E52
The Effects of Inflation Targeting for Financial Development
Staff Analytical Note 2019-21
Geoffrey R. Dunbar,
Amy (Qijia) Li
The adoption of inflation targeting (IT) by central banks leads to an increase of 10 to 20 percent in measures of financial development, with a lag. We also find evidence that the financial sector benefits of IT adoption were higher for early-adopting central banks.
Content Type(s):
Staff Research,
Staff Analytical Notes
Topic(s):
Financial Institutions,
Inflation targets,
Transmission of monetary policy
JEL Code(s):
E,
E4,
E44,
E5,
E58
Central Bank Communication That Works: Lessons from Lab Experiments
Staff Working Paper 2019-21
Oleksiy Kryvtsov,
Luba Petersen
We use controlled laboratory experiments to test the causal effects of central bank communication on economic expectations and to distinguish the underlying mechanisms of those effects. In an experiment where subjects learn to forecast economic variables, we find that central bank communication has a stabilizing effect on individual and aggregate outcomes and that the size of the effect varies with the type of communication.
Content Type(s):
Staff Research,
Staff Working Papers
Topic(s):
Monetary policy implementation,
Transmission of monetary policy
JEL Code(s):
C,
C9,
D,
D8,
D84,
E,
E3,
E5,
E52
Central Bank Digital Currency and Banking
Staff Working Paper 2019-20
Jonathan Chiu,
Mohammad Davoodalhosseini,
Janet Hua Jiang,
Yu Zhu
Will a central bank digital currency (CBDC) reduce commercial banks’ intermediation? Responding to this widespread concern, we show—on the contrary—that when banks have market power, a CBDC can in fact promote bank intermediation.
Content Type(s):
Staff Research,
Staff Working Papers
Topic(s):
Digital Currencies and Fintech,
Market structure and pricing,
Monetary Policy,
Monetary policy framework
JEL Code(s):
E,
E5,
E50,
E58
Labor Mobility in a Monetary Union
Staff Working Paper 2019-15
Daniela Hauser,
Martin Seneca
The optimal currency literature has stressed the importance of labor mobility as a precondition for the success of monetary unions. But only a few studies formally link labor mobility to macroeconomic adjustment and policy. In this paper, we study macroeconomic dynamics and optimal monetary policy in an economy with cyclical labor flows across two distinct regions that share trade links and a common monetary framework.
Content Type(s):
Staff Research,
Staff Working Papers
Topic(s):
Business fluctuations and cycles,
Economic models,
Labour markets,
Monetary policy framework,
Regional economic developments
JEL Code(s):
E,
E3,
E32,
E5,
E52,
F,
F4
The Distributional Effects of Conventional Monetary Policy and Quantitative Easing: Evidence from an Estimated DSGE Model
Staff Working Paper 2019-6
Stefan Hohberger,
Romanos Priftis,
Lukas Vogel
This paper compares the distributional effects of conventional monetary policy and quantitative easing (QE) within an estimated open-economy DSGE model of the euro area.
Content Type(s):
Staff Research,
Staff Working Papers
Topic(s):
Economic models,
Interest rates,
Monetary Policy,
Transmission of monetary policy
JEL Code(s):
E,
E4,
E44,
E5,
E52,
F,
F4,
F41
Limited Commitment, Endogenous Credibility and the Challenges of Price-level Targeting
Staff Working Paper 2018-61
Gino Cateau,
Malik Shukayev
This paper studies the cost of limited commitment when a central bank has the discretion to adjust policy whenever the costs of honoring its past commitments become high. Specifically, we consider a central bank that seeks to implement optimal policy in a New Keynesian model by committing to a price-level target path.
Content Type(s):
Staff Research,
Staff Working Papers
Topic(s):
Credibility,
Inflation targets,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E5,
E52
Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada
Staff Discussion Paper 2018-18
Thomas J. Carter,
Rhys R. Mendes,
Lawrence L. Schembri
In 1991, Canada became the second country to adopt an inflation target as a central pillar of its monetary policy framework. The regime has proven much more successful than initially expected, both in achieving price stability and in stabilizing the real economy against a wide range of shocks.
Content Type(s):
Staff Research,
Staff Discussion Papers
Topic(s):
Credibility,
Inflation targets,
Monetary Policy,
Monetary policy framework
JEL Code(s):
E,
E5,
E52,
E58,
E6,
E61
Disaggregating Household Sensitivity to Monetary Policy by Expenditure Category
Staff Analytical Note 2018-32
Tony Chernis,
Corinne Luu
Because the Bank of Canada has started withdrawing monetary stimulus, monitoring the transmission of these changes to monetary policy will be important. Subcomponents of consumption and housing will likely respond differently to a monetary policy tightening, both in terms of the aggregate effect and timing.
Content Type(s):
Staff Research,
Staff Analytical Notes
Topic(s):
Business fluctuations and cycles,
Domestic demand and components,
Econometric and statistical methods,
Housing,
Interest rates,
Recent economic and financial developments,
Transmission of monetary policy
JEL Code(s):
C,
C3,
C32,
E,
E2,
E21,
E22,
E4,
E43,
E47,
E5,
E52
Monetary Policy Uncertainty: A Tale of Two Tails
Staff Working Paper 2018-50
Tatjana Dahlhaus,
Tatevik Sekhposyan
We document a strong asymmetry in the evolution of federal funds rate expectations and map this observed asymmetry into measures of monetary policy uncertainty. We show that periods of monetary policy tightening and easing are distinctly related to downside (policy rate is higher than expected) and upside (policy rate is lower than expected) uncertainty.
Content Type(s):
Staff Research,
Staff Working Papers
Topic(s):
Business fluctuations and cycles,
Econometric and statistical methods,
Monetary policy communications,
Transmission of monetary policy,
Uncertainty and monetary policy
JEL Code(s):
C,
C1,
C18,
C3,
C32,
E,
E0,
E02,
E4,
E43,
E5,
E52