Canada's pioneering experience with a flexible exchange rate in the 1950s
Subtitle: lessons learned for monetary policy in a small open economy
By: Michael D. Bordo, Ali Dib, Lawrence Schembri
Contributors: Dib, Ali; Schembri, Lawrence; National Bureau of Economic Research
Series: NBER working paper series -- working paper 13605; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13605.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "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 post-1957 period and Canada's macroeconomic performance suffered as a result"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 12/4/2007.

Includes bibliographical references.

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