In May 2000, the Treasurer/Minister of Finance invited me to review the operation of monetary policy in New Zealand and provided me with the Terms of Reference. In undertaking the review, I have read the wide range of submissions provided to me and have met with a number of submitters and other interested parties. I visited New Zealand for two weeks in November 2000 in order to observe the oper...

This paper provides a non-technical introduction to monetary policy—what it is, how it works, and why it matters. It discusses inflation volatility and why this is damaging to the economy, as well as why increased stability of output growth is desirable. In both cases, changes in Canadian economic performance over the past few decades are examined. The paper also provides a detailed discussion ...

Oil price shocks are the main source of macroeconomic fluctuations in oil exporting countries. It is believed that appropriate monetary policy can help to stabilize these unwanted variations toward optimal allocations. A stochastic dynamic general equilibrium model featuring the properties of both cost push and wealth effect transmission channels is developed for the Iranian economy. In thi...

This paper provides a non-technical introduction to monetary policy—what it is, how it works, and why it matters. It discusses inflation volatility and why this is damaging to the economy, as well as why increased stability of output growth is desirable. In both cases, changes in Canadian economic performance over the past few decades are examined. The paper also provides a detailed discussion ...

Exploring the functioning of internal capital markets in financial conglomerates, this paper conducts a novel test of the credit channel of monetary policy. We look at how the response of lending to monetary policy shocks differs across small banks that are affiliated with the same bank holding company but that operate in distinct geographical areas. These subsidiaries tap into the same pool of...

The authors assess the stabilization properties of simple monetary policy rules within the context of a small open-economy model constructed around the limited-participation assumption and calibrated to salient features of the Canadian economy. By relying on limited participation as the main nominal friction that affects the artificial economy, the authors provide an important check of the robu...

This paper examines various transmission mechanism channels on economic growth in Malaysia over the quarterly period 1980:1-2004:4 using bounds testing approach. The bounds test reveals evidence of cointegration between the real GDP and the real exchange rate and share prices that address the exchange rate and asset price channels as the key transmission mechanisms in the conduct of the monetar...