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What is the Ideal Monetary Policy Regime? Improving the Bank of Canada's Inflation-targeting Program

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Author Info

  • Michael Parkin

    (University of Western Ontario)

Abstract

The recent financial crisis has emphasized the role of sound monetary policy for ensuring Canada’s future prosperity. Although much is right with the Bank of Canada’s inflation-targeting regime, improvements such as price-level targeting and closer attention to potential financial instability should be considered in the lead-up to the renewal of the program in 2011.

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Bibliographic Info

Article provided by C.D. Howe Institute in its journal C.D. Howe Institute Commentary.

Volume (Year): (2009)
Issue (Month): 279 (January)
Pages:

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Handle: RePEc:cdh:commen:279

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Related research

Keywords: monetary policy; central bank policy; inflation-targeting program;

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References

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  1. William Poole, 1970. "Optimal choice of monetary policy instruments in a simple stochastic macro model," Staff Studies, Board of Governors of the Federal Reserve System (U.S.) 57, Board of Governors of the Federal Reserve System (U.S.).
  2. Mankiw, N. Gregory & Reis, Ricardo, 2002. "What measure of inflation should a central bank target?," Working Paper Series, European Central Bank 0170, European Central Bank.
  3. Stephen Murchison & Andrew Rennison, 2006. "ToTEM: The Bank of Canada's New Quarterly Projection Model," Technical Reports, Bank of Canada 97, Bank of Canada.
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  6. Oleksiy Kryvtsov & Malik Shukayev & Alexander Ueberfeldt, 2008. "Adopting Price-Level Targeting under Imperfect Credibility," Working Papers, Bank of Canada 08-3, Bank of Canada.
  7. Gino Cateau & Oleksiy Kryvtsov & Malik Shukayev & Alexander Ueberfeldt, 2009. "Adopting Price-Level Targeting under Imperfect Credibility in ToTEM," Working Papers, Bank of Canada 09-17, Bank of Canada.
  8. Jonung, Lars, 1979. "Knut wicksell's norm of price stabilization and Swedish monetary policy in the 1930's," Journal of Monetary Economics, Elsevier, Elsevier, vol. 5(4), pages 459-496, October.
  9. Robert Dittmar & William T. Gavin & Finn E. Kydland, 1999. "Price-level uncertainty and inflation targeting," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue Jul, pages 23-34.
  10. Bernanke, Ben S, 1995. "The Macroeconomics of the Great Depression: A Comparative Approach," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 27(1), pages 1-28, February.
  11. Goodhart, Charles, 2001. "What Weight Should Be Given to Asset Prices in the Measurement of Inflation?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(472), pages F335-56, June.
  12. Svensson, Lars E O, 1996. "Price-level Targeting versus Inflation Targeting: A Free Lunch?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1510, C.E.P.R. Discussion Papers.
  13. Cote, Denise & Kuszczak, John & Lam, Jean-Paul & Liu, Ying & St-Amant, Pierre, 2006. "A comparison of twelve macroeconomic models of the Canadian economy," Journal of Policy Modeling, Elsevier, Elsevier, vol. 28(5), pages 523-562, July.
  14. Bank for International Settlements, 2003. "Monetary stability, financial stability and the business cycle: five views," BIS Papers, Bank for International Settlements, Bank for International Settlements, number 18, 8.
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Cited by:
  1. Pierre L. Siklos & Matthias Neuenkirch, 2014. "How Monetary Policy is made: Two Canadian Tales," CAMA Working Papers 2014-53, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  2. Alexandre Laurin, 2009. "Cleaning Up the Books: A Proposal for Revamping Corporate Group Taxation in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 284, March.
  3. Colin Busby & William B.P. Robson, 2009. "Near Hits and Big Misses: Canada's 2009 Fiscal Accountability Rankings," C.D. Howe Institute Backgrounder, C.D. Howe Institute, C.D. Howe Institute, issue 117, April.
  4. Gregor W. Smith, 2009. "The Missing Links: Better Measures of Inflation and Inflation Expectations in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 287, April.
  5. Marion Steele & Francois Des Rosiers, 2009. "Building Affordable Rental Housing in Unaffordable Cities: A Canadian Low-Income Housing Tax Credit," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 289, May.
  6. Hatcher, Michael C., 2011. "Comparing inflation and price-level targeting: A comprehensive review of the literature," Cardiff Economics Working Papers E2011/22, Cardiff University, Cardiff Business School, Economics Section.
  7. Jean Boivin, 2009. "Getting it Right When You Might Be Wrong: The Choice Between Price-Level and Inflation Targeting," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 297, September.
  8. William B.P. Robson, 2009. "To the Next Level: From Gold Standard to Inflation Targets - to Price Stability?," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 285, March.
  9. Philippe Bergevin & William B.P. Robson, 2011. "The Costs of Inflexible Indexing: Avoiding the Adverse Fiscal Impacts of Lower Inflation," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 322, February.
  10. Thorsten V. Koeppl, 2009. "How Flexible Can Inflation Targeting Be? Suggestions for the Future of Canada's Targeting Regime," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 293, August.
  11. Steven Renzetti, 2009. "Wave of the Future: The Case for Smarter Water," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 281, February.
  12. Claire de Oliveira, 2009. "Good Health to All: Reducing Health Inequalities among Children in High- and Low-Income Canadian Families," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 288, May.
  13. Poonam Puri, 2009. "A Matter of Voice: The Case for Abolishing the 30 percent Rule for Pension Fund Investments," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 283, February.
  14. Christopher Ragan, 2011. "The Roads Not Taken: Why the Bank of Canada Stayed With Inflation Targeting," e-briefs, C.D. Howe Institute 125, C.D. Howe Institute.
  15. Roger A. Samson & Stephanie Bailey Stamler, 2009. "Going Green for Less: Cost-Effective Alternative Energy Sources," C.D. Howe Institute Commentary, C.D. Howe Institute, C.D. Howe Institute, issue 282, February.

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