The Monetary Policy Transmission Mechanism and Policy Rules in Canada

David Longworth and Brian O’Reilly

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: The inflation-targeting regime in place in Canada requires a clear understanding of the monetary policy transmission mechanism and a way to exploit knowledge of that mechanism in taking policy decisions. This paper discusses the Bank of Canada’s current view of the monetary policy transmission mechanism in Canada and the internal research on which it is based, as well as some of the Bank’s research on policy rules. The main objectives in the research on various elements of the monetary policy framework at the Bank of Canada is to find practical ways of addressing the major types of uncertainty in formulating monetary policy. Uncertainty has become particularly important as a research and practical issue in recent years with the shift in focus to how to conduct monetary policy in a low and stable inflation environment. The concluding section outlines three steps that experience and research has led staff at the Bank of Canada to identify as helpful to policy makers in dealing with uncertainty and providing a sharper focus to discussions at key meetings on monetary policy.

Date: 2000-05
New Economics Papers: this item is included in nep-cba, nep-mon and nep-pke
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Citations: View citations in EconPapers (4)

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Chapter: The Monetary Policy Transmission Mechanism and Policy Rules in Canada (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:72

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