This paper extends the efficiency wages/partially adaptive expectations Phillips curve, otherwise known as the price-price Phillips curve, from a closed economy context to an open economy one with both commodity trade and capital mobility. We also consider the case of a monetary union (a...

This paper presents Bank of Canada staff's current assessment of the US neutral rate, along with a newly developed set of models on which that assessment is based. The overall assessment is that the US neutral rate currently lies in a range of 1.75 to 2.75 percent. This represents a decline of...

This paper extends the efficiency wages/partially adaptive expectations Phillips curve, otherwise known as the price-price Phillips curve, from a closed economy context to an open economy one with both commodity trade and capital mobility. We also consider the case of a monetary union (a...

In order that an organized body of knowledge might be classified as science, its hypothetical law must be based on facts. Unlike any other social science, fallacies are the root of the technique of thinking in economics. By the lapse of time theses fallacies have been accepted as if they...

This study investigates the impact effect of monetary policy shocks on the exchange rates of Brazil, Mexico and Chile. We find that even a focus on 1 day exchange rate changes following policy events - which reduces the potential for reverse causality considerably - fails to lend support for the...

This paper reconsiders logics somewhat implicit in many international trade models, particularly centered around Law of One Price. International trade is identical to domestic trade with two markets combined as one only when no frictions, such as labor immobility, or some states close, exist. In...

We show that despite heterogeneous financial intermediation structures in EMEs, bank credit remains a powerful channel of policy transmission in these countries. Credit conditions have been affected by global factors. In particular, our empirical results suggest that exchange rate appreciation...

Has financial globalisation compromised central banks' ability to manage domestic financial conditions? This paper tackles this question by studying the dynamics of bond yields encompassing 31 advanced and emerging market economies. To gauge the extent to which external financial conditions...

The paper analyzes dollarization in the sense of asset substitution, where a foreign currency competes with local assets, especially domestic capital, as a store of value, the impact of dollarization on capital accumulation and output, and why economies remain dollarized long after a successful...