Inflation Targeting and Price-Level-Path Targeting in the GEM: Some Open Economy Considerations Staff Working Paper 2008-6 Donald Coletti, René Lalonde, Dirk Muir This paper compares the performance of simple inflation targeting (IT) and price-level path targeting (PLPT) rules to stabilize the macroeconomy, in response to a series of shocks, similar to those seen in Canada and the United States over the 1983 to 2004 period. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Inflation and prices, Inflation: costs and benefits, Monetary policy framework JEL Code(s): C, C5, C51, C52, E, E1, E17, E3, E31, E5, E52
Understanding Productivity: A Review of Recent Technical Research Staff Discussion Paper 2008-3 Richard Dion, Robert Fay The authors provide an extensive review of the rapidly expanding research on productivity, both at the macro and micro levels. They focus primarily on papers written about Canada, but also draw on selected studies from other countries, especially the United States, where such work sheds important light on particular aspects of productivity growth. The authors […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): Productivity JEL Code(s): D, D2, D24, O, O3, O31, O4, O40, O47
Unsecured Debt, Consumer Bankruptcy, and Small Business Staff Working Paper 2008-5 Césaire Meh, Yaz Terajima In this paper we develop a quantitative model of entrepreneurial activity (risk-taking) and consumer bankruptcy choices and use the model to study the effects of bankruptcy regulations on entrepreneurial activity, bankruptcy rate and welfare. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Financial stability, Financial system regulation and policies JEL Code(s): D, D3, D31, E, E2, E21, J, J2, J23
What Affects MFP in the Long-Run? Evidence from Canadian Industries Staff Working Paper 2008-4 Danny Leung, Yi Zheng In this paper we explore variables that may have an impact on multifactor productivity (MFP) in the long-run using the KLEMS database for Canada. We estimate a dynamic heterogeneous panel error-correction model of twelve 2-digit level industries. Content Type(s): Staff research, Staff working papers Research Topic(s): Productivity JEL Code(s): C, C2, C23, D, D2, D24, O, O3, O30
Adopting Price-Level Targeting under Imperfect Credibility Staff Working Paper 2008-3 Oleksiy Kryvtsov, Malik Shukayev, Alexander Ueberfeldt This paper measures the welfare gains of switching from inflation-targeting to price-level targeting under imperfect credibility. Vestin (2006) shows that when the monetary authority cannot commit to future policy, price-level targeting yields higher welfare than inflation targeting. Content Type(s): Staff research, Staff working papers Research Topic(s): Credibility, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52
A Wave of Protectionism? An Analysis of Economic and Political Considerations Staff Working Paper 2008-2 Philipp Maier In light of the U.S. current account deficit, pressure is high on Asian countries to revalue their currencies. The calls from some U.S. policymakers for tariffs on imports from China has sparked fears that this could trigger a world-wide surge in protectionism. Content Type(s): Staff research, Staff working papers Research Topic(s): International topics, Recent economic and financial developments, Regional economic developments JEL Code(s): E, E6, E66, F, F3, F32, F4, F47
The Carry Trade, Portfolio Diversification, and the Adjustment of the Japanese Yen Staff Discussion Paper 2008-2 Corinne Luu In this paper, the author considers whether fundamentals or other factors can explain the yen's ongoing weakness. In particular, the importance of capital outflows due to the carry trade and longer-term portfolio investment outflows, which may be delaying the adjustment of the yen, are investigated. A simple portfolio model is developed, composed of a speculative […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): Exchange rates, International topics, Recent economic and financial developments JEL Code(s): F, F2, F21, F3, F31, F32, G, G1, G11
An Overview of Carbon Markets and Emissions Trading: Lessons for Canada Staff Discussion Paper 2008-1 Michael R. King The author provides an overview of carbon markets and explains how emissions trading can be important in encouraging the reduction of CO2 emissions in an efficient manner. He describes the key steps in establishing a cap-and-trade system, and reviews the European experiences with emissions trading. He highlights the lessons learned from the EU Emissions Trading […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): International topics, Market structure and pricing JEL Code(s): D, D4, N, N5, N50, Q, Q2, Q21
Default Dependence: The Equity Default Relationship Staff Working Paper 2008-1 Stuart Turnbull, Jun Yang The paper examines three equity-based structural models to study the nonlinear relationship between equity and credit default swap (CDS) prices. These models differ in the specification of the default barrier. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Financial markets JEL Code(s): G, G1, G12, G13
Electronic Transactions as High-Frequency Indicators of Economic Activity Staff Working Paper 2007-58 John Galbraith, Greg Tkacz Since the advent of standard national accounts data over 60 years ago, economists have traditionally relied on monthly or quarterly data supplied by central statistical agencies for macroeconomic modelling and forecasting. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles JEL Code(s): E, E1, E17, E2, E27, E6, E66