Stability of Central Bank Preferences, Macroeconomic Shocks, and Efficiency of the Monetary Policy. Empirical Evidence for Canada

Gabriel Rodríguez

No 0603E, Working Papers from University of Ottawa, Department of Economics

Abstract: Following the approach suggested by Favero and Rovelli (2002), I estimate a three-equations system for different sub-samples for Canada. The results indicate that the preferences of the monetary authority have changed between the different regimes. In particular, the parameter associated to the implicit target of inflation has been reduced significantly. The macroeconomic conditions from the side of the aggregate demand have been more favorable than those related to the aggregate supply. The standard deviation of the monetary rule suggests that it has been conducted successfully in the last regime.

Keywords: Interest Rate Rule; Structural Breaks; Inflation Targeting; Output Gap; Preferences; Macroeconomic Shocks (search for similar items in EconPapers)
JEL-codes: C2 E5 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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