F41 - Open Economy Macroeconomics - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-29T12:35:09+00:00International Portfolio Rebalancing and Fiscal Policy Spillovers
https://www.bankofcanada.ca/2023/11/staff-working-paper-2023-56/
We evaluate, both empirically and theoretically, the spillover effects that debt-financed fiscal policy interventions of the United States have on other economies. We consider a two-country model with international portfolio rebalancing effects. We show that US fiscal expansions would increase global long-term rates and hinder economic activity in the rest of the world.2023-11-01T15:05:01+00:00enInternational Portfolio Rebalancing and Fiscal Policy Spillovers2023-11-01Economic modelsFiscal policyInternational topicsStaff Working Paper 2023-56https://www.bankofcanada.ca/wp-content/uploads/2023/11/swp2023-56.pdfInternational Portfolio Rebalancing and Fiscal Policy SpilloversSami AlpandaUluc AysunSerdar KabacaNovember 2023EE3E32E6E62FF4F41F44International Economic Sanctions and Third-Country Effects
https://www.bankofcanada.ca/2023/08/staff-working-paper-2023-46/
We study the transmission and third-country effects of international sanctions. A sanctioned country’s losses are mitigated, and the sanctioning country’s losses amplified, if a third country does not join the sanctions, but the third country benefits from not joining.2023-08-23T14:39:57+00:00enInternational Economic Sanctions and Third-Country Effects2023-08-23Economic modelsExchange ratesInternational topicsStaff Working Paper 2023-46https://www.bankofcanada.ca/wp-content/uploads/2023/08/swp2023-46.pdfStaff Working Paper 2023-46Fabio GhironiDaisoon KimGalip Kemal OzhanAugust 2023FF3F31F4F41F42F5F51A Behavioral New Keynesian Model of a Small Open Economy Under Limited Foresight
https://www.bankofcanada.ca/2023/08/staff-working-paper-2023-44/
This paper studies exchange rate dynamics by incorporating bounded rationality, that is, limited foresight, in a small open-economy model. This behavior of limited foresight helps explain several observations and puzzles in the data of exchange rate movements.2023-08-17T08:56:50+00:00enA Behavioral New Keynesian Model of a Small Open Economy Under Limited Foresight2023-08-17Business fluctuations and cyclesExchange ratesInternational topicsMonetary policy transmissionStaff Working Paper 2023-44https://www.bankofcanada.ca/wp-content/uploads/2023/08/swp2023-44.pdfStaff Working Paper 2023-44Seunghoon NaYinxi XieAugust 2023EE4E43E7E70FF3F31F4F41The Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model
https://www.bankofcanada.ca/2023/02/staff-discussion-paper-2023-5/
We use a small open economy model with overlapping generations to evaluate secular dynamics of the neutral rate in Canada from 1980 to 2018. We find that changes in both foreign and domestic factors resulted in a protracted decline in the neutral rate.2023-02-21T16:42:36+00:00enThe Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model2023-02-21Economic modelsInterest ratesMonetary policyStaff Discussion Paper 2023-5https://www.bankofcanada.ca/wp-content/uploads/2023/02/sdp2023-5.pdfStaff Discussion Paper 2023-5Martin KunclDmitry MatveevFebruary 2023EE2E21E22E4E43E5E50E52E58FF4F41Stagflation and Topsy-Turvy Capital Flows
https://www.bankofcanada.ca/2022/11/staff-working-paper-2022-46/
Unregulated capital flows are likely excessive during a stagflation episode, owing to a macroeconomic externality operating through the economy’s supply side. Inflows raise domestic wages and cause unwelcome upward pressure on firm costs, yet market forces likely generate such inflows. Optimal capital flow management instead requires net outflows.2022-11-10T10:24:04+00:00enStagflation and Topsy-Turvy Capital Flows2022-11-10Inflation and pricesInternational financial marketsInternational topicsMonetary policyStaff Working Paper 2022-46https://www.bankofcanada.ca/wp-content/uploads/2022/11/swp2022-46.pdfStaff Working Paper 2022-46Julien BenguiLouphou CoulibalyNovember 2022DD6D62EE5E52FF3F32F38F4F41Fiscal Policy in the Age of COVID-19: Does It “Get in All of the Cracks”?
https://www.bankofcanada.ca/2022/11/staff-working-paper-2022-45/
The COVID-19 pandemic has caused an atypical recession in which some sectors of the economy boomed and others collapsed. This required a unique fiscal policy reaction to both support firms and stimulate activity in sectors with slack. Was fiscal policy able to get where it was needed? Mostly, yes.2022-11-07T12:55:12+00:00enFiscal Policy in the Age of COVID-19: Does It “Get in All of the Cracks”?2022-11-07Coronavirus disease (COVID-19)Firm dynamicsFiscal policyInternational topicsStaff Working Paper 2022-45https://www.bankofcanada.ca/wp-content/uploads/2022/11/swp2022-45.pdfStaff Working Paper 2022-45Pierre-Olivier GourinchasŞebnem Kalemli-ÖzcanVeronika PenciakovaNicholas SanderNovember 2022DD5D57EE6E62FF4F41International Transmission of Quantitative Easing Policies: Evidence from Canada
https://www.bankofcanada.ca/2022/06/staff-working-paper-2022-30/
This paper examines the cross-border spillovers from major economies’ quantitative easing (QE) policies to their trading partners. We concentrate on spillovers from the US to Canada during the zero lower bound period when QE policies were actively used.2022-06-30T07:51:33+00:00enInternational Transmission of Quantitative Easing Policies: Evidence from Canada2022-06-30Business fluctuations and cyclesInternational topicsMonetary policy transmissionStaff Working Paper 2022-30https://www.bankofcanada.ca/wp-content/uploads/2022/06/swp2022-30.pdfInternational Transmission of Quantitative Easing Policies: Evidence from CanadaSerdar KabacaKerem TuzcuogluJune 2022EE5E52FF4F41F44Foreign Exchange Interventions: The Long and the Short of It
https://www.bankofcanada.ca/2022/06/staff-working-paper-2022-25/
This paper studies the effects of foreign exchange (FX) interventions in a two-region model where governments issue both short- and long-term bonds. We find that the term premium channel dominates the trade balance channel in our calibrated model. As a result, the conventional beggar-thy-neighbor effects of interventions are overturned.2022-06-06T15:10:58+00:00enForeign Exchange Interventions: The Long and the Short of It2022-06-06Business fluctuations and cyclesExchange rate regimesExchange ratesForeign reserves managementInternational financial marketsInternational topicsStaff Working Paper 2022-25https://www.bankofcanada.ca/wp-content/uploads/2022/06/swp2022-25.pdfForeign Exchange Interventions: The Long and the Short of ItPatrick AlexanderSami AlpandaSerdar KabacaJune 2022FF3F31F33F4F41Exports and the Exchange Rate: A General Equilibrium Perspective
https://www.bankofcanada.ca/2022/04/staff-working-paper-2022-18/
How do a country’s exports change when its currency depreciates? Does it matter which forces drive the exchange rate deprecation in the first place? We find that this relationship varies greatly depending on what drives exchange rate movements, and we conclude that the direct relationship between the exchange rate and exports is weak for Canada.2022-04-04T14:42:27+00:00enExports and the Exchange Rate: A General Equilibrium Perspective2022-04-04Balance of payments and componentsBusiness fluctuations and cyclesExchange rate regimesExchange ratesInternational topicsMonetary policy transmissionTrade integrationStaff Working Paper 2022-18https://www.bankofcanada.ca/wp-content/uploads/2022/04/swp2022-18.pdfExports and the Exchange Rate: A General Equilibrium PerspectivePatrick AlexanderAbeer RezaApril 2022FF3F31F32F33F4F41Monetary Policy and Redistribution in Open Economies
https://www.bankofcanada.ca/2022/02/staff-working-paper-2022-6/
We study how different types of monetary policy shape the distributional effects of external economic shocks on households’ consumption in a small open economy. Our results present a trade-off between maintaining overall stabilization and controlling consumption inequality.2022-02-07T08:54:58+00:00enMonetary Policy and Redistribution in Open Economies2022-02-07Exchange rate regimesMonetary policyStaff Working Paper 2022-6https://www.bankofcanada.ca/wp-content/uploads/2022/02/swp2022-6.pdfStaff Working Paper 2022-6Xing GuoPablo OttonelloDiego PerezFebruary 2022EE3E32E5E52FF4F41F44