Bank of Canada
234 Wellington Street
Ottawa, Ontario, Canada
Institutional Affiliation: Bank of Canada
Information about this author at RePEc
NBER Working Papers and Publications
|November 2007||Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s:(Hard) Lessons Learned for Monetary Policy in a Small Open Economy|
with Michael D. Bordo, Ali Dib: w13605
This paper revisits Canada's pioneering experience with floating exchange rate over the period 1950-1962. It examines whether the floating rate was the best option for Canada in the 1950s by developing and estimating a New Keynesian small open economy model of the Canadian economy. The model is then used to conduct a counterfactual analysis of the impact of different monetary policies and exchange rate regimes. The main finding indicates that the flexible exchange rate helped reduce the volatility of key macro-economic variables. The Canadian monetary authorities, however, clearly did not understand all of the implications of conducting monetary policy under a flexible exchange rate and a high degree of capital mobility. The paper confirms that monetary policy was more volatile in the ...
Published: Michael Bordo & Ali Dib & Lawrence Schembri, 2010.
"Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open Economy,"
International Journal of Central Banking,
International Journal of Central Banking, vol. 6(3), pages 51-99, September.
citation courtesy of
|1989||Export Prices and Exchange Rates: An Industry Approach|
in Trade Policies for International Competitiveness, Robert C. Feenstra, editor