Inflation Targeting in Canada
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From Next Best to World Class: the People and Events That Have
FROM NEXT BEST TO WORLD CLASS The People and Events That Have Shaped the Canada Deposit Insurance Corporation 1967–2017 C. Ian Kyer FROM NEXT BEST TO WORLD CLASS CDIC—Next Best to World Class.indb 1 02/10/2017 3:08:10 PM Other Historical Books by This Author A Thirty Years’ War: The Failed Public Private Partnership that Spurred the Creation of the Toronto Transit Commission, 1891–1921 (Osgoode Society and Irwin Law, Toronto, 2015) Lawyers, Families, and Businesses: A Social History of a Bay Street Law Firm, Faskens 1863–1963 (Osgoode Society and Irwin Law, Toronto, 2013) Damaging Winds: Rumours That Salieri Murdered Mozart Swirl in the Vienna of Beethoven and Schubert (historical novel published as an ebook through the National Arts Centre and the Canadian Opera Company, 2013) The Fiercest Debate: Cecil Wright, the Benchers, and Legal Education in Ontario, 1923–1957 (Osgoode Society and University of Toronto Press, Toronto, 1987) with Jerome Bickenbach CDIC—Next Best to World Class.indb 2 02/10/2017 3:08:10 PM FROM NEXT BEST TO WORLD CLASS The People and Events That Have Shaped the Canada Deposit Insurance Corporation 1967–2017 C. Ian Kyer CDIC—Next Best to World Class.indb 3 02/10/2017 3:08:10 PM Next Best to World Class: The People and Events That Have Shaped the Canada Deposit Insurance Corporation, 1967–2017 © Canada Deposit Insurance Corporation (CDIC), 2017 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior written permission of the publisher. -
Redalyc.Recovering Effectiveness of Monetary Policy Under A
Investigación Económica ISSN: 0185-1667 [email protected] Facultad de Economía México Ferreira de Mendonça, Helder; Caldas Montes, Gabriel Recovering Effectiveness of Monetary Policy under a Deflationary Environment Investigación Económica, vol. LXVII, núm. 265, julio-septiembre, 2008, pp. 121-144 Facultad de Economía Distrito Federal, México Available in: http://www.redalyc.org/articulo.oa?id=60126504 How to cite Complete issue Scientific Information System More information about this article Network of Scientific Journals from Latin America, the Caribbean, Spain and Portugal Journal's homepage in redalyc.org Non-profit academic project, developed under the open access initiative investigación económica, vol. LXVII, 265, julio-septiembre de 2008, pp. 121-144 Recovering Effectiveness of Monetary Policy under a Deflationary Environment H����� F������� �� M������� G������ C����� M�����* I����������� In the last decade several countries have adopted a strategy for the conduction of a monetary policy based on central bank independence and inflation targeting. Generally speaking, the results suggest success in controlling inflation in several emerging and industrialized economies. Nonetheless, under this new environment, a new problem emerges: the risk of deflation. The main problem, as shown by the Japanese experience, is that falling prices may lock countries into a spiral of economic decline. The core of the idea is: once consumers expect falling prices, they decide to postpone purchases, implying a decrease in demand and a consequent fall in prices by producers, threatening the start of a spiral of fall in output and demand. Furthermore, based on the results presented by a profit maximizing behavior, both prices and output are influenced by expected future prices. -
Annual Report 2003 La De Annuel Rapport Rapport Annueldela 2003 Banque Ducanada
BANK OF CANADA OF CANADA BANK ANNUAL REPORT 2003 ANNUAL REPORT BANK OF CANADA ANNUAL REPORT 2003 2003 2003 BANQUE DU CANADA DU CANADA BANQUE BANQUE DU CANADA DU BANQUE LA DE ANNUEL RAPPORT RAPPORT ANNUEL DE LA RAPPORT Bank of Canada — 234 Wellington Street, Ottawa, Ontario K1A 0G9 5211 — CN ISSN 0067-3587 ISSN CN — 5211 0G9 K1A Ontario Ottawa, Street, Wellington 234 — Canada of Bank his many volunteer activities. His warm wit and generous spirit will be sorely missed. sorely be will spirit generous and wit warm His activities. volunteer many his Gerry Bouey and neither will his community to which he contributed to the very end through end very the to contributed he which to community his will neither and Bouey Gerry Those who worked with him over the course of his long and remarkable career will never forget never will career remarkable and long his of course the over him with worked who Those Achievement Award. In 1987, he was made a Companion of the Order of Canada. of Order the of Companion a made was he 1987, In Award. Achievement of Laws from Queen’s University. In 1983, he was presented with the Outstanding Public Service Public Outstanding the with presented was he 1983, In University. Queen’s from Laws of In 1981, he was made an Officer of the Order of Canada and also received an Honorary Doctor Honorary an received also and Canada of Order the of Officer an made was he 1981, In economic development and to the Bank’s growing international reputation. -
Part V. Canada
Part V. Canada anada adopted inflation targeting in 1991, one • The midpoint of the inflation target range, 2 percent, year after New Zealand. In examining its experi- is above zero, as in all the cases we examine here. Cence, we stress the following themes: • Although accountability is a central feature of the inflation-targeting regime in Canada, the central • Inflation targeting in Canada was not the result of bank is more accountable to the public in general legislation. However, as in New Zealand, the inflation than to the government directly. target in Canada is jointly determined and announced by both the government and the central bank. • A key and increasingly important feature of Canada’s inflation-targeting regime is a strong commitment to • As in New Zealand, inflation targeting was adopted transparency and the communication of monetary after substantial disinflationary pressures were already policy strategy to the public. evident. • As an adjunct to implementing the inflation-targeting • In Canada, there is a clear-cut separation between regime, the central bank makes use of a monetary the entity that measures the inflation variable to be conditions index (MCI), a weighted average of the targeted (Statistics Canada) and the entity that is exchange rate and the short-term interest rate, as a accountable for achieving the inflation target and short-run operating target. assessing past performance (the Bank of Canada). • The consumer price index (CPI) inflation rate has THE ADOPTION OF INFLATION TARGETS been chosen as the primary target variable because of The adoption of inflation targeting in Canada on Febru- its “headline” quality, although a core inflation rate ary 26, 1991, followed a three-year campaign by the Bank that excludes energy and food prices and the effects of indirect taxes is also used and reported in assessing of Canada to promote price stability as the long-term whether the trend inflation rate is on track for the objective of monetary policy. -
Dalrev Vol44 Iss2 Pp165 171.Pdf (3.958Mb)
H. H. F. Binhammer CANADA'S MONEY MUDDLE IN RETROSPECT QUESTIONS CONCERNING THE CONTROL OF MONEY are as old as the use of money as a measure and store of value and a medium of exchange. Relevant to developments in the post~war period in Canada is the controversy of the mid-nineteenth century between the so-called Banking School and the Currency School. The Banking School maintained that control over the supply of money should be left in the hands of private commercial banks. The Currency School, on the other hand, among other things, maintained that control over the money supply should be vested directly or indirectly in the hands of government. Settlement in favour of the Currency School led to the establishment of central banks, mainly under the sponsorship of govern ments. These banks were to provide an umbrella over the private commercial banks. In Canada, interference with the money supply by a central authority started with the Finance Act of 1914. This was followed by the establishment of the Bank of Canada in 1935, first with limited government participation and later with com~ plete government control. The degree to which the central bank should assert its influence over the economy and in particular over the private commercial banks was not questioned until the fifties. During the thirties, the war, and the immediate post-war period, the central bank, on the whole, accommodated the activities of the chartered banks without question. That is to say, the central bank, in a more or less routine fashion, assisted the chartered banks to meet the demands of business. -
Old, New and Post Keynesian Perspectives on the Is-Lm Framework: a Contrast and Evaluation
1 OLD, NEW AND POST KEYNESIAN PERSPECTIVES ON THE IS-LM FRAMEWORK: A CONTRAST AND EVALUATION Huw Dixon and Bill Gerrard 1.1 INTRODUCTION The IS-LM framework has been the standard model used for understanding and teaching Keynesian macroeconomics since 1960. Indeed, even a monetarist such as Friedman could subscribe to a modified version of the IS-LM model (1970); Sargent and Wallace (1975) formulated the first New Classical neutrality proposition with an IS-LM model of aggregate demand. The main decisive break from this tradition was Barro's textbook, Macroeconomics, whose first edition was 1984. This relegated the IS-LM analysis to an afterthought at the end of the book; the bulk of the textbook was devoted to the market clearing intertemporal equilibrium approach to macroeco nomics, which had its origins in the work of Lucas and Rapping (1969). In this paper we trace a brief history of the IS-LM framework, and how it has been reinterpreted over the last few decades by economists of an essentially "Keynesian" viewpoint. The IS-LM model was developed as a way of understanding Keynes's General Theory. What defines the IS-LM approach? There are two crucial factors: I. Output is an endogenous variable which is demand-determined. 2. The rate of interest is an endogenous variable, and affects both the demand for goods (investment and possibly consumption) and the demand for money. The IS-LM model can be viewed either as merely a model of aggregate demand (as in the AD-AS model), in which case (1) becomes the demand for output. -
Wage Restraint, Employment, and the Legacy of the General Theory's
Wage Restraint, Employment, and the Legacy of the General Theory’s Chapter 19 Oliver Landmann University of Freiburg i.Br. 1. Introduction The role of wages in the determination of aggregate employment remains one of the most hotly debated public policy issues in many European countries, and in Germany in particular. This is not surprising in view of the high-profile collective bargaining process in which organized labor and employers negotiate over wages under conditions of persistent high unemployment. Of course, neither side wishes to be seen as merely pursuing its narrow self-interest. Both employers and unions make every effort to argue as convincingly as possible that their respective bargaining positions are conducive to employment growth and macroeconomic stability. Employers invoke neoclassical labor market theory to reject any demands for wage increases in excess of labor productivity growth. Such wage increases, they argue, mean rising labor costs and hence cause job losses. Unions, in contrast, emphasize demand-side repercussions and appeal to the keynesian notion of the circular flow of income. They maintain that any attempt to boost employment through wage restraint is doomed to fail, mainly because this would reduce the purchasing power of consumers and thus domestic demand. Accordingly, they tend to put the blame for high unemployment on misguided fiscal and monetary policies. In contrast, the mainstream consensus regards the longer-term trends of output and employment as supply-determined and, therefore, rejects demand-side explanations of unemployment, except for the very short-run cyclical movements. Keynes (1936) devoted an entire chapter of his General Theory, the famous Chapter 19, to the macroeconomic effects of changes in money-wages. -
Labour Share Decline, Financialisation and Structural Change
Cambridge Journal of Economics 2019, 43, 1073–1102 doi:10.1093/cje/bez025 Advance Access publication 7 June 2019 Downloaded from https://academic.oup.com/cje/article/43/4/1073/5512530 by Seoul National University Library user on 16 August 2020 Labour share decline, financialisation and structural change Riccardo Pariboni and Pasquale Tridico* The purpose of this article is to explain the determinants behind the decline of la- bour share in the last three to four decades in OECD countries. In our view, this de- cline was determined by financialisation and was deepened by the structural changes that occurred almost simultaneously in those economies. Financialisation, or finance- dominated capitalism, from the 1980s onwards, was a key element in the strategic offen- sive of the advanced countries’ dominant classes to appropriate higher shares of national income and to restore their control over the political process, a control that had been threatened by a generalised advancement of the labour movement in the 1970s. The development of a finance-dominated capitalism was helped by the process of global- isation, which affected not only OECD countries but also many others. A new, though unstable, macroeconomic model emerged, which we will call financial capitalism. In financial capitalism, trade unions lost power vis-à-vis capital, labour flexibility increased enormously, and a structural change from manufacturing to services was accelerated in rich countries. This resulted in negative consequences for labour share and income inequality. After having provided a theoretical discussion of the determinants of the compression of the wage share, making reference to the relevant literature, we submit our hypotheses to empirical scrutiny, performing a panel data analysis on 28 OECD Countries. -
Keynesian Models of Depression. Supply Shocks and the COVID-19 Crisis
Keynesian models of depression. Supply shocks and the COVID-19 Crisis. Escañuela Romana, Ignacio1 Abstract. The objective of this work is twofold: to expand the depression models proposed by Tobin and analyse a supply shock, such as the Covid-19 pandemic, in this Keynesian conceptual environment. The expansion allows us to propose the evolution of all endogenous macroeconomic variables. The result obtained is relevant due to its theoretical and practical implications. A quantity or Keynesian adjustment to the shock produces a depression through the effect on aggregate demand. This depression worsens in the medium/long-term. It is accompanied by increases in inflation, inflation expectations and the real interest rate. A stimulus tax policy is also recommended, as well as an active monetary policy to reduce real interest rates. On the other hand, the pricing or Marshallian adjustment foresees a more severe and rapid depression in the short-term. There would be a reduction in inflation and inflation expectations, and an increase in the real interest rates. The tax or monetary stimulus measures would only impact inflation. This result makes it possible to clarify and assess the resulting depression, as well as propose policies. Finally, it offers conflicting predictions that allow one of the two models to be falsified. Keywords: macroeconomics, equilibrium, supply shock, COVID-19, depression. JEL codes: E10, E12, E20, E30, I10. 1. Object and results. This work expands on Tobin’s Keynesian models (1975), analyses their local stability, and studies their evolution in the face of a supply shock (specifically, the Covid-19 pandemic). First, an equation for the real interest rate, based on Taylor’s curve, is added. -
Keynes, the Keynesians and Monetarism
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Congdon, Tim Book — Published Version Keynes, the Keynesians and Monetarism Provided in Cooperation with: Edward Elgar Publishing Suggested Citation: Congdon, Tim (2007) : Keynes, the Keynesians and Monetarism, ISBN 978-1-84720-139-3, Edward Elgar Publishing, Cheltenham, http://dx.doi.org/10.4337/9781847206923 This Version is available at: http://hdl.handle.net/10419/182382 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/3.0/legalcode www.econstor.eu © Tim Congdon, 2007 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. -
The International Development Research Centre a Brief History
The International Development Research Centre A Brief History G. Newkirk, IDRC Green, IDRC F. IDRC C. Sanger, Cover photos, IDRC: Peter Bennett Lorra Thompson Daniel Buckles Neil McKee Yves Beaulieu The International Development Research Centre A Brief History “This is an idea whose time has come.” The sentiments expressed by Maurice Strong on the creation of the International Development Research Centre (IDRC) in 1970 echoed those of many distinguished persons in the decades before the birth of this new Canadian entity. For some years, it had become apparent that the spectacular benefits science and technology were bringing to the rich countries were not reaching the developing world. In 1935, after taking note of the global imbalance in scientific develop- ment, eminent biologist Julian Huxley called for a truly scientific approach to the problem of development. United States President Harry Truman declared in his 1949 inaugural address that it was time to mobilize science for worldwide development. He was convinced that the technology that had worked for the devel- oped countries would provide the same benefits when transplanted to underdeveloped regions. 1 In the mid-1960s, the UN Advisory Committee on the Application of Science and Technology to Development observed that “Only a very small fraction of the world’s scientific and technical resources is devoted to the problems of the developing countries; the overwhelming propor- tion of the world’s intellectual capital, as well as its physical capital, is applied toward … the highly developed countries.” And in her 1966 benchmark essay, Spaceship Earth, British economist, journalist, and educator Barbara Ward (Lady Jackson) declared that “… mankind is … a single, equal and fraternal community” and that “… new technological resources, properly deployed, will conquer ancient shortage.” By the late 1960s, a climate of disillusion and distrust surrounded for- eign aid programs. -
The Case of Canadian Inflation Targeting
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Laidler, David Working Paper The interactive evolution of economic ideas and experience: The case of Canadian inflation targeting EPRI Working Paper, No. 2015-1 Provided in Cooperation with: Economic Policy Research Institute (EPRI), Department of Economics, University of Western Ontario Suggested Citation: Laidler, David (2015) : The interactive evolution of economic ideas and experience: The case of Canadian inflation targeting, EPRI Working Paper, No. 2015-1, The University of Western Ontario, Economic Policy Research Institute (EPRI), London (Ontario) This Version is available at: http://hdl.handle.net/10419/123489 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have