In this paper, we offer one possible way to estimate a key feature of the Bank of Canada’s main macroeconomic model, the Quarterly Projection Model or QPM. The key feature which is the focus of this study is the so-called "short-run equilibrium values" or SREQs which link the dynamic portion...

We examine the relative ability of simple inflation targeting (IT) and price level targeting (PLT) monetary policy rules to minimize both inflation variability and business cycle fluctuations in Canada for shocks that have important consequences for global commodity prices. We find that...

This paper compares the capability of simple inflation targeting (IT) and price-level-path targeting (PLPT) rules to minimize inflation and output gap variability in a two-country, two-sector version of the Global Economy Model calibrated for Canada and the United States. We find that simple...

This paper examines the implications of changes in economic behaviour for simple inflation-forecast­based monetary rules of the type currently used at two inflation-targeting central banks. Three types of changes in economic behaviour are considered, changes that are motivated by developments...

This paper examines the implications of changes in economic behaviour for simple inflation-forecast–based monetary rules of the type currently used at two inflation-targeting central banks. Three types of changes in economic behaviour are considered, changes that are motivated by developments...

This report provides a detailed technical description of an updated version of the Terms-of-Trade Economic Model (ToTEM II), which replaced ToTEM (Murchison and Rennison 2006) in June 2011 as the Bank of Canada’s quarterly projection model for Canada. ToTEM has been improved along a number of...

This is the first of three papers describing NAOMI1, a new quarterly forecasting model developed in the Economic Analysis and Forecasting Division at the Department of Finance. NAOMI’s intended purpose is twofold. First, it is capable of producing reliable, judgement-free macroeconomic...

This paper provides an introduction to the Canadian side of NAOMI (North American Open economy Macro-econometric Integrated model), a new economic model developed at the Department of Finance. NAOMI is intended to bridge the gap between pure forecasting models whose forecasts are often difficult...

Several authors have presented reduced-form evidence suggesting that the degree of exchange-rate pass-through to the consumer price index has declined in Canada since the 1970s and is currently close to zero. Authors such as Taylor (2000) suggest that this is due to a change in the conduct of...