A Further Analysis of Exchange Rate Targeting in Canada

Robert Amano and Tony Wirjanto ()

Staff Working Papers from Bank of Canada

Abstract: In a recent paper Mercenier and Sekkat (1988) conclude that the Bank of Canada has followed a policy of exchange rate targeting using the money supply. We reexamine their results using a different estimation approach and with different assumptions about the forcing process of the exogenous variables. We also extend the sample period to include more recent observations. While we find some weak evidence to support their conclusion, the results, in general, suggest that the Bank of Canada has not used the money supply to target the Canada-U.S. exchange rate. Dans une etude publiee en 1988, Mercenier et Sekkat ont conclu que la Banque du Canada avait des objectifs en matiere de taux de change qu'elle cherchait a atteindre en influant sur la masse monetaire. Les auteurs de la presente etude reexaminent les resultats obtenus par Mercenier et Sekkat en mettant a contribution une methode d'estimation differente et en faisant d'autres types d'hypotheses au sujet du processus de dynamisation des variables exogenes. Ils retiennent aussi une periode d'estimation plus longue de maniere a tenir compte d'observations plus recentes. Les resultats empiriques confirment dans une tres faible mesure la these de Mercenier et Sekkat, mais ils indiquent, de maniere generale, que la Banque du Canada ne s'est pas servie de la masse monetaire dans la poursuite d'un taux de change cible du dollar canadien par rapport au dollar americain.

New Economics Papers: this item is included in nep-fmk and nep-ifn
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.bankofcanada.ca/wp-content/uploads/2010/04/wp94-2.pdf (application/pdf)

Related works:
Working Paper: A Further Analysis of Exchange Rate Targeting in Canada (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:94-2

Access Statistics for this paper

More papers in Staff Working Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().