A Monthly Model of the Canadian Financial System

In this study we describe preliminary estimates of a model of the Canadian financial system. At the present time, the model explains the behaviour of the authorities, the chartered banks, the public, and the trust and mortgage lean companies. The variables explained include monetary aggregates, several interest rates, and the major assets of the chartered tanks and of the trust and mortgage loan companies. The model differs from existing Canadian models in that we use monthly data rather than quarterly or annual data. We think the shorter observation period permits the econometric estimates to capture the dynamic adjustment processes more accurately. In particular, the mean lags implied by our equations tend to be considerably shorter than those in existing models. we have also written a description of this model entitled: "Un Modèle Mensuel du secteur Financier au Canada", which is to be published in l'Actualité Economique in 1976.