Suchergebnisse

Central bankers and other economists sometimes describe the inflation targeting practiced in Canada as flexible. This flexibility refers to deferring the planned return of the Consumer Price Index (CPI) inflation rate to the 2 percent target. In this article, I outline two ways to measure flexibility: by seeing whether the forecast for future inflation varies with either (1) current values of inflation or output growth or (2) the forecast for future output growth. The latter correlation would suggest that the Bank of Canada aims to stabilize output growth in addition to stabilizing the inflation rate. I describe how to detect evidence of these two types of flexibility in the Bank of Canada's own forecasts (also known as projections) from its quarterly Monetary Policy Report. However, there is little sign of economically significant flexibility between 2003 and 2019.

Abstract What explains the widespread fear of deflation? This article reviews the history of thought, economic history, and empirical evidence on deflation, with a view to answering this question. It also outlines informally the main effects of deflation in applied monetary models. The main finding is that – for both historical and contemporary deflations – there are many open, empirical questions that could be answered using the tools economists use to study inflation and monetary policy more generally.

AbstractWe describe the history and current state of economic research in Canada, including the role of the Canadian Economics Association (CEA) and other institutions. Our paper is organized around two central questions. Is Canadian economic research distinctive? And should it be more distinctive? We argue that a distinct Canadian "school" of economics existed in the past, but that economic research in Canada has converged on an evolving global standard in both method and topics. We ask whether this convergence serves the Canadian public interest and we raise some questions about the future of the CEA and its flagship journal, the CJE.

AbstractDifferences across decades in the counter‐cyclical stance of fiscal policy can identify whether the growth in government spending affects output growth and so speeds recovery from a recession. We study government‐spending reaction functions from the 1920s and 1930s for twenty countries. There are two main findings. First, surprisingly, government spending was less counter‐cyclical in the 1930s than in the 1920s. Second, the growth of government spending did not have a significant effect on output growth, so that there is little evidence that this feature of fiscal policy played a stabilizing role in the interwar period.