The Quantity of Money and Monetary Policy Staff Working Paper 1999-5 David Laidler The relationships among the quantity theory of money, monetarism and policy regimes based on money-growth and inflation targeting are briefly discussed as a prelude to an exposition of alternative views of money's role in the transmission mechanism of monetary policy. The passive-money view treats the money supply as an endogenous variable that plays no role […] Content Type(s): Staff research, Staff working papers Topic(s): Monetary aggregates, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E5, E51, E52
Inflation Targeting under Uncertainty Technical Report No. 85 Gabriel Srour This paper studies the implications of certain kinds of uncertainty for monetary policy. It first describes the optimum policy rule in a simple model of the transmission mechanism as in Ball and Svensson. Content Type(s): Staff research, Technical reports Topic(s): Monetary policy and uncertainty, Monetary policy framework JEL Code(s): E, E5, E52
The Exchange Rate Regime and Canada's Monetary Order Staff Working Paper 1999-7 David Laidler It is a mistake to debate the merits of alternative exchange rate regimes for Canada independently of other features of the monetary order. A coherent order requires a well-defined goal for monetary policy, one that the authorities are capable of achieving, and that anchors private sector expectations. For it to be liberal, the relevant authorities […] Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Monetary policy framework JEL Code(s): E, E5, E52, F, F3, F31
Forecasting GDP Growth Using Artificial Neural Networks Staff Working Paper 1999-3 Greg Tkacz, Sarah Hu Financial and monetary variables have long been known to contain useful leading information regarding economic activity. In this paper, the authors wish to determine whether the forecasting performance of such variables can be improved using neural network models. The main findings are that, at the 1-quarter forecasting horizon, neural networks yield no significant forecast improvements. […] Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Monetary and financial indicators JEL Code(s): C, C4, C45, E, E3, E37, E4, E44
Capital Gains and Inflation Taxes in a Life-cycle Model Staff Working Paper 1999-2 Charles Leung, Guang-Jia Zhang Inflation distorts an economy through many channels. This paper highlights the interaction between inflation and capital gains tax and how they distort an economy through the financial market. Several observations motivate this research. First, capital formation or investment is an important channel for economic agents to smooth their consumption over their life cycles. Second, capital […] Content Type(s): Staff research, Staff working papers Topic(s): Inflation: costs and benefits JEL Code(s): E, E5, E6
Dynamic Employment and Hours Effects of Government Spending Shocks Staff Working Paper 1999-1 Mingwei Yuan, Wenli Li In this paper, we analyze the dynamic behaviour of employment and hours worked per worker in a stochastic general equilibrium model with a matching mechanism between vacancies and unemployed workers. The model is estimated for the United States using the Generalized Methods of Moments (GMM) estimation technique. An increase in government spending raises hours worked […] Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Labour markets JEL Code(s): E, E2, E24, E3, E32, E6, E62, J, J6, J64
Can a Matching Model Explain the Long-Run Increase in Canada's Unemployment Rate? Staff Working Paper 1998-19 Andreas Hornstein, Mingwei Yuan The authors construct a simple general equilibrium model of unemployment and calibrate it to the Canadian economy. Job creation and destruction are endogenous. In this model, they consider several potential factors that could contribute to the long-run increase in the Canadian unempoloyment rate: a more generous unemployment insurance system, higher layoff costs, higher discretionary taxes, […] Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Labour markets JEL Code(s): E, E2, E6, J, J4
La politique monétaire a-t-elle des effets asymétriques sur l'emploi? Staff Working Paper 1998-17 Lise Pichette Several economists, including Cover (1992), Ammer and Brunner (1995), Macklem, Paquet, and Phaneuf (1996), have worked over the past few years to determine whether monetary policy shocks have asymmetric effects on output. These authors have generally found that negative monetary shocks tend to reduce output growth significantly, and that positive shocks generally have a weaker […] Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy transmission JEL Code(s): E, E5
Consumer Attitudes, Uncertainty, and Consumer Spending Staff Working Paper 1998-16 Denise Côté, Marianne Johnson This study examines the link between consumer expenditures and the Conference Board's Index of Consumer Attitudes, an index highly regarded for some time as a useful leading indicator of consumer expenditures. However, the theory that identifies why it may be useful in an analysis of consumption is less well established. To explore this question, we […] Content Type(s): Staff research, Staff working papers Topic(s): Domestic demand and components, Economic models JEL Code(s): D, D1, D12, E, E2
On the Believable Benefits of Low Inflation Staff Working Paper 1998-15 Christopher Ragan This paper reviews the existing theoretical and empirical literature addressing the benefits of low inflation. The ultimate goal is to arrive at a set of benefits in which a monetary authority can have genuine confidence. I argue that the current state of economic research—both empirical and theoretical—provides little basis for believing in significant observable benefits […] Content Type(s): Staff research, Staff working papers Topic(s): Inflation: costs and benefits JEL Code(s): E, E3, E31