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Canadian monetary policy and the US federal funds rate


  • H. Sonmez Atesoglu
  • John Smithin


This article examines the empirical relation between the Canadian overnight rate and the US federal funds rate over the period 1975 to 2005. There is evidence of cointegration in the earlier part of the period from 1975 to 1988, but not in the post-1988 period to date. The inference is that the Bank of Canada has been pursuing monetary policy independently of the USA at least during the 1988 to 2005 period.

Suggested Citation

  • H. Sonmez Atesoglu & John Smithin, 2008. "Canadian monetary policy and the US federal funds rate," Applied Economics Letters, Taylor & Francis Journals, vol. 15(11), pages 899-904.
  • Handle: RePEc:taf:apeclt:v:15:y:2008:i:11:p:899-904 DOI: 10.1080/13504850600905048

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    References listed on IDEAS

    1. Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
    2. Duso, Tomaso & Roller, Lars-Hendrik, 2003. "Endogenous deregulation: evidence from OECD countries," Economics Letters, Elsevier, vol. 81(1), pages 67-71, October.
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    5. Tomaso Duso, 2005. "Lobbying and regulation in a political economy: Evidence from the U.S. cellular industry," Public Choice, Springer, vol. 122(3), pages 251-276, March.
    6. Dutz, Mark & Hayri, Aydin, 1999. "Does More Intense Competition Lead to Higher Growth?," CEPR Discussion Papers 2249, C.E.P.R. Discussion Papers.
    7. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    8. Ai, Chunrong & Sappington, David E M, 2002. "The Impact of State Incentive Regulation on the U.S. Telecommunications Industry," Journal of Regulatory Economics, Springer, vol. 22(2), pages 133-159, September.
    9. Besley, Timothy & Case, Anne, 2000. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," Economic Journal, Royal Economic Society, vol. 110(467), pages 672-694, November.
    10. Torsten Persson & Guido Tabellini, 2005. "The Economic Effects of Constitutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661926, July.
    11. Jeffrey A. Frankel & David Romer, 1996. "Trade and Growth: An Empirical Investigation," NBER Working Papers 5476, National Bureau of Economic Research, Inc.
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