Abstract
ABSTRACT By analyzing the documents issued by the Bank of Canada, an original monetary policy can be seen. The Canadian monetary policy tries to maintain its autonomy, whilst at the same time respecting floating exchange rates. The numerous innovations are the foundation of a New Consensus on monetary policy. Far from the dilemma rule versus discretion of the former Monetarist and Keynesian methods, a new dilemma will be the focus: that of credibility versus confidence. Here, the anticipations of the economic agents, the behavior of financial markets and the price of assets play a dominating role. Based on the innovative experiment of the Bank of Canada during the 1990s, the characteristics of the New Consensus will be explained. Far from making independent central banks some high-powered institutions, it shows them instead to be “statues with feet of clay”.
Highlights
By analyzing the documents issued by the Bank of Canada, an original monetary policy can be seen
An opposition appears between the “dominating” countries on a currency area, which can choose the internal objectives for the monetary policy, and the “dominated” countries that are often forced to seek the external objective
An attempt to clarify the following questions will be made: What are the differences between the “New Consensus” and the Keynesian or Monetarist system that preceded it? As we are familiar with frequent monetary and financial crises, is it possible to guarantee monetary stability? What part do financial markets play in the determination of today’s monetary policy? It is the Canadian experiment of the last ten years that will be analyzed
Summary
RESUMO: Ao analisar os documentos emitidos pelo Banco do Canadá, uma política monetária original pode ser vista. A política monetária canadense tenta manter sua autonomia e, ao mesmo tempo, respeitar as taxas de câmbio flutuantes. As numerosas inovações são a base de um novo consenso sobre política monetária. Longe da regra do dilema versus discrição dos antigos métodos monetaristas e keynesianos, um novo dilema será o foco: o da credibilidade versus confiança. Com base no experimento inovador do Banco do Canadá durante a década de 1990, as características do Novo Consenso serão explicadas. Longe de tornar bancos centrais independentes algumas instituições de alta potência, isso os mostra como “estátuas com pés de barro”. PALAVRAS-CHAVE: Banco Central; política monetária; metas de inflação; Banco do Canadá; credibilidade versus confiança
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