Suchergebnisse

Recent events highlight the relationship between credit availability and aggregate output. Macroeconomic models for Canada are estimated to investigate links between non-price lending standards, business loans, and output. US macroeconomic and financial market conditions are allowed to impact the Canadian economy. Responses to financial shocks differ in the two countries. Real-time data have a significant impact on the results. The United States and Canada may be "two solitudes" insofar as the impact of credit conditions is concerned. Differences in the quality of banking supervision and in the effectiveness of monetary policies in the two countries may partially explain the results.

One way of evaluating how well monetary authorities perform is to provide the public with a regular and independent second opinion. The European Central Bank (ECB) and the Bank of England (BoE) are shadowed by professional and academic economists who provide a separate policy rate recommendation in advance of the central bank announcement. In this paper, we systematically evaluate this second opinion and find that, first, the shadow committee of the ECB tends to be relatively less inflation averse than the ECB. In contrast, the shadow committee of the BoE proposes a more hawkish monetary policy stance than the BoE. Second, consensus within a shadow committee is far easier to reach when there is no pressure to change the policy rate. Third, the ECB's shadow committee is more activist than the ECB's Governing Council and a larger degree of consensus within the former brings about a greater likelihood that the two committees will agree. [Copyright Elsevier B.V.]