Revisiting the Coyne Affair: A Singular Event That Changed the Course of Canadian Monetary History

Pierre Siklos ()

Working Papers from Wilfrid Laurier University, Department of Economics

Abstract: The Coyne affair is the greatest institutional crisis faced by the Bank of Canada in its history. The crisis took place in 1959-1961 and led to the resignation of the Governor, once he was cleared of any wrongdoing. The crisis eventually resulted in a major reform of the Bank of Canada. The paper highlights the critical role played by the directive in central banking legislation. Archival and empirical evidence is used to assess the performance of monetary policy throughout the 1950s. In doing so, a real-time dataset is constructed for both Canada and the US that permits estimation of reaction functions. I find that the case against James Coyne is \'not proven\'.

Keywords: Coyne Affair; monetary policy stance; Taylor rules; real-time data (search for similar items in EconPapers)
JEL-codes: N10 E52 E58 C52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-his, nep-mac and nep-mon
Date: 2007, Revised 2007
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Persistent link: http://EconPapers.repec.org/RePEc:wlu:wpaper:eg0047

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