In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. In this paper, we develop a two-sector two-good closed economy new Keynesian model to study the optimal choice of price index in markets with...

The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...

In this paper, we estimate income- and substitution- labour supply and participation elasticities for Canadian married women using data from the Survey of Labour and Income Dynamics 1996-2005. We use the Canadian Tax and Credit Simulator (CTaCS) and detailed information on the structure of...

This paper examines the effectiveness of Canadian immigration policy by analyzing the differences in the returns to education between first, second and third generation immigrant men. Regression results indicate that the second generation with high school education and lower do not earn...

Although immigration has become a major growth factor for Canadian labour force, there is little economic research on the effect of immigration on native-born Canadians' labour market performance. This paper examines the relationship between changes in the share of immigrants by sub-labour...