Burkart and Ellingsen's (2004) model of trade credit and bank credit rationing predicts that trade credit will be used by medium-wealth and low-wealth firms to help ease bank credit rationing.
: Credit and credit aggregates; Financial marketsZero-coupon interest rates are the fundamental building block of fixed-income mathematics, and as such have an extensive number of applications in both finance and economics.
: Econometric and statistical methods; Financial markets; Interest ratesExisting studies using low-frequency data show that macroeconomic shocks contribute little to international stock market covariation.
: Financial markets; International topics; Market structure and pricingThe author describes results obtained by using a new methodology to estimate potential output for the United Kingdom.
: Business fluctuations and cycles; Econometric and statistical methods; Potential outputThe authors use Jarrow and Turnbull's (1995) reduced-form methodology to model the evolution of the term structure of interest rates in the United States for different credit classes and different industries.
: Financial markets; Market structure and pricingThe first step in designing effective policies to stabilize an economy is to understand business cycles. No country is isolated from the world economy and external shocks are becoming increasingly important.
: Exchange rate regimes; International topics; Transmission of monetary policyAccording to the Fisher hypothesis, the gap between Canadian nominal and Real Return Bond yields (or break-even inflation rate) should be a good measure of inflation expectations.
: Inflation and prices; Interest rates; Market structure and pricingThe authors model trading by foreign and domestic investors in developed-country equity markets.
: Financial markets; International topics; Market structure and pricingThe author studies the macroeconomic consequences of discretionary changes in the fiscal policy instruments for Canada.
: Economic models; Exchange rates; Fiscal PolicyIn this paper, the author describes reduced-form linear and non-linear econometric models developed to forecast and analyze quarterly data on output growth in the Canadian manufacturing sector from 1981 to 2003.
: Business fluctuations and cycles; Econometric and statistical methodsThe authors present an empirical model to forecast short-run inventory investment behaviour for Canada.
: Domestic demand and components; Econometric and statistical methodsThe author empirically tests two aspects of the interaction between financial variables and inventory investment: negative cash flow and finance constraints due to asymmetric information.
: Business fluctuations and cycles; Financial InstitutionsIn two recent papers, Jensen (2002) and Walsh (2003), using a hybrid New Keynesian model, demonstrate that a regime that targets either nominal income growth or the change in the output gap can effectively replicate the outcome under commitment and hence reduce the size of the stabilization bias.
: Inflation targets; Transmission of monetary policyThe authors compute welfare-maximizing Taylor rules in a dynamic general-equilibrium model of a small open economy.
: Economic models; Exchange rates; Inflation targetsThe authors examine the evidence presented by Galí and Gertler (1999) and Galí, Gertler, and Lopez-Salido (2001, 2003) that the inflation dynamics in the United States can be well-described by the New Keynesian Phillips curve (NKPC).
: Econometric and statistical methods; Inflation and pricesThe authors apply the asset-valuation model developed by Rabinovitch (1989) to six publicly traded Canadian banks over the period 1982–2002.
: Financial InstitutionsCounterfeiting is a significant public policy issue, because paper money, despite rumours of its demise, remains an important part of our payments system.
: Bank notesSocial learning models of investment provide an interesting explanation for sudden changes in investment behaviour.
: Business fluctuations and cyclesInflation forecasting is fundamental to monetary policy. In practice, however, economists are faced with competing goals: accuracy and theoretical consistency.
: Economic models; Inflation and pricesThe authors conduct a counterfactual simulation of the proposed rules under the new Basel Capital Accord (Basel II), including the revised treatment of expected and unexpected credit losses proposed by the Basel Committee in October 2003.
: Financial InstitutionsThe authors study a general-equilibrium economy in which agents have the ability to invest in a risky technology.
: Economic models; Financial Institutions; Financial marketsChoosing a well-designed framework for fiscal and monetary policies is a challenge for economic authorities.
: Fiscal Policy; Monetary policy frameworkThe author uses panel data to assess the sensitivity of investment to cash flow in non-financial firms, taking into account the role their financial health plays in investment decisions.
: Business fluctuations and cyclesThe author documents some stylized facts about the Canadian financial structure. He explores these empirical facts in the context of Canadian financial legislation and finds that, over the 1990s, Canadian businesses became more heavily dependent on financial markets as their primary source of external funding.
: Financial Institutions; Financial services; Recent economic and financial developmentsThe author examines the impact of economic uncertainty on the demand for money.
: Monetary aggregatesThe author reviews the theoretical and empirical literature to examine the traditional perception that the following trade-off exists between economic efficiency and stability in the banking system: a competitive banking system is more efficient and therefore important to growth, but market power is necessary for stability in the banking system.
: Financial Institutions; Financial services; Market structure and pricingSince the early 1980s, long-term government bond yields in the euro zone have declined, in line with those in other industrialized countries.
: Interest rates; International topicsThe authors construct three financial conditions indexes (FCIs) for Canada based on three approaches: an IS-curve-based model, generalized impulse-response functions, and factor analysis.
: Monetary and financial indicators; Monetary conditions indexThis paper investigates the question of whether a transition to a low-inflation environment, induced by a shift in monetary policy, results in a decline in the degree of pass-through of exchange rate movements to consumer prices.
: Exchange rates; Inflation and prices; International topicsThe author suggests that commodity-linked bonds could provide a potential means for less-developed countries (LDCs) to raise money on the international capital markets, rather than through standard forms of financing.
: Development economics; Financial markets; International topicsUsing French data on industrial firms over the period 1989-2001, the authors estimate a "flexible" Translog production function that accounts for the volumes and durations of factor utilization.
: Economic modelsThe author develops a twin crisis model featuring multiple banks.
: Exchange rates; Financial InstitutionsThe authors describe a new view of cross-listing that links the impact on firm valuation to the firm's ability to develop an active secondary market for its shares in the U.S. markets.
: Financial markets; International topicsThe authors contrast the impact of two sources of information flow on the volatility of prices, trading activity, and liquidity in the brokered interdealer market for Government of Canada bonds.
: Debt Management; Financial markets; Market structure and pricingSince the autumn of 1997, the Bank of Canada's regional offices (located in Halifax, Montréal, Toronto, Calgary, and Vancouver) have conducted consultations with businesses across Canada on a quarterly basis. These consultations are now referred to as the Business Outlook Survey (BOS).
: Business fluctuations and cycles; Domestic demand and componentsThe authors analyze the dynamics of national saving–investment relationships to determine the degree of international capital mobility.
: International topicsIn an overlapping-generations model that represents a small open economy, where agents live two periods, liquidity constraints lead to low economic development when the only accumulable factor is human capital.
: Economic modelsAlthough a number of studies have demonstrated the importance of the degree of factor utilization in economic analysis, the impact of the durations of utilization in a production function remains largely unknown, particularly in terms of the duration of equipment utilization.
: Economic modelsThe authors use simple new finite-sample methods to test the empirical relevance of the New Keynesian Phillips curve (NKPC) equation.
: Econometric and statistical methods; Inflation and pricesEntrepreneurship is a key factor in promoting growth in output and employment. Consequently, to encourage new start-ups, most governments in developed countries have public venture capital programs.
: Financial markets; Fiscal Policy; Labour marketsIn an era when the primary policy instrument is the level of the short-term interest rate, a comparison of that rate with some equilibrium rate can be a useful guide for policy and a convenient method to measure the stance of monetary policy.
: Interest ratesThe types of contracts that arise in a typical vertical manufacturer–retailer relationship are more sophisticated than usually assumed in standard macroeconomic models.
: Market structure and pricingThe author re-examines the demand-for-money theory in an intertemporal optimization model. The demand for real money balances is derived to be a function of real income and the rates of return of all financial assets traded in the economy.
: Monetary aggregatesEvidence suggests that banks, like firms, face financial frictions when raising funds.
: Business fluctuations and cycles; Financial Institutions; Transmission of monetary policyThe authors test the statistical significance of Pindyck's (1999) suggested class of econometric equations that model the behaviour of long-run real energy prices.
: Econometric and statistical methodsThe authors develop a small open-economy dynamic stochastic general-equilibrium (DSGE) model in an attempt to understand the dynamic relationships in Canadian macroeconomic data.
: Business fluctuations and cycles; Economic models; Inflation and pricesIn this paper, the authors use polynomial adjustment cost (PAC) models to analyze and forecast the main components of the U.S. trade sector.
: Domestic demand and components; Econometric and statistical methods; International topicsThe author proposes a class of exact tests of the null hypothesis of exchangeable forecast errors and, hence, of the hypothesis of no difference in the unconditional accuracy of two competing forecasts.
: Econometric and statistical methodsA basic neoclassical model of production is often used to assess the contribution of investment to output growth. In the model, investment raises the capital stock and output growth increases in proportion to the growth in capital.
: Productivity
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