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64
result(s)
Estimating the Appropriate Quantity of Settlement Balances in a Floor System
Staff Discussion Paper 2023-26
Narayan Bulusu,
Matthew McNeely,
Kaetlynd McRae,
Jonathan Witmer
This paper presents two complementary approaches to estimating the appropriate quantity of settlement balances needed to effectively operate monetary policy under a floor system in Canada.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Financial institutions,
Financial markets,
Financial system regulation and policies,
Monetary policy implementation,
Payment clearing and settlement systems
JEL Code(s):
E,
E4,
E41,
E42,
E5,
E52,
E58,
G,
G2,
G21,
G28
Reviewing Canada’s Monetary Policy Implementation System: Does the Evolving Environment Support Maintaining a Floor System?
Staff Discussion Paper 2023-10
Toni Gravelle,
Ron Morrow,
Jonathan Witmer
At the onset of the pandemic, the Bank of Canada transitioned its framework for monetary policy implementation from a corridor system to a floor system, which it has since decided to maintain. We provide a comprehensive analysis of both frameworks and assess their relative merits based on five key criteria that define a sound framework.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Market structure and pricing,
Monetary policy implementation,
Payment clearing and settlement systems
JEL Code(s):
D,
D4,
D47,
E,
E4,
E42,
E5,
E58
Understanding Post-COVID Inflation Dynamics
Staff Working Paper 2022-50
Martin Harding,
Jesper Lindé,
Mathias Trabandt
We propose a macroeconomic model with a nonlinear Phillips curve that has a flat slope when inflationary pressures are subdued and steepens when inflationary pressures are elevated. Our model can generate more sizable inflation surges due to cost-push and demand shocks than a standard linearized model when inflation is high.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Central bank research,
Coronavirus disease (COVID-19),
Economic models,
Inflation and prices,
Inflation: costs and benefits,
Monetary policy,
Monetary policy implementation
JEL Code(s):
E,
E3,
E30,
E31,
E32,
E37,
E4,
E44,
E5,
E52
Settlement Balances Deconstructed
Staff Discussion Paper 2022-13
Parnell Chu,
Grahame Johnson,
Scott Kinnear,
Karen McGuinness,
Matthew McNeely
Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Central bank research,
Coronavirus disease (COVID-19),
Financial markets,
Monetary policy implementation
JEL Code(s):
E,
E5,
E58,
E59,
E6,
G,
G0,
G01
The impact of the Bank of Canada’s Government Bond Purchase Program
Staff Analytical Note 2021-23
Rohan Arora,
Sermin Gungor,
Joe Nesrallah,
Guillaume Ouellet Leblanc,
Jonathan Witmer
We assess the response of Government of Canada bond yields to the Bank of Canada’s initial announcement of the Government Bond Purchase Program (GBPP) as well as to the Bank’s later GBPP purchase operations.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Monetary policy,
Monetary policy implementation,
Monetary policy transmission
JEL Code(s):
E,
E5,
E52,
E58,
E6,
E63
More Money for Some: The Redistributive Effects of Open Market Operations
Staff Working Paper 2021-46
Christian Bustamante
I use a search-theoretic model of money to study how open market operations affect the conduct of monetary policy and what this means for households along the wealth distribution. In the model, households vary in the size and composition of their portfolios, which in turn implies that they may be unevenly affected by open market operations.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Monetary policy,
Monetary policy implementation,
Monetary policy transmission
JEL Code(s):
E,
E2,
E21,
E3,
E32,
E5,
E52
The Side Effects of Safe Asset Creation
Staff Working Paper 2021-34
Sushant Acharya,
Keshav Dogra
The secular decline in real interest rates has created a challenge for monetary policy, now confronting the zero lower bound more often. An increase in the supply of safe assets reduces downward pressure on the natural interest rate. This allows monetary policy to reach price stability and full employment, but not without cost—permanently lower investment.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Fiscal policy,
Monetary policy implementation
JEL Code(s):
E,
E3,
E4,
E5,
G,
G1,
H,
H6
Networking the Yield Curve: Implications for Monetary Policy
Staff Working Paper 2021-4
Tatjana Dahlhaus,
Julia Schaumburg,
Tatevik Sekhposyan
We study how different monetary policies affect the yield curve and interact. Our study highlights the importance of the spillover structure across the yield curve for policy-making.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Interest rates,
Monetary policy implementation
JEL Code(s):
C,
C1,
C18,
C2,
C21,
C5,
C53,
E,
E4,
E43,
E44,
E5,
E52
Implementation and Effectiveness of Extended Monetary Policy Tools: Lessons from the Literature
Staff Discussion Paper 2020-16
Grahame Johnson,
Sharon Kozicki,
Romanos Priftis,
Lena Suchanek,
Jonathan Witmer,
Jing Yang
This paper summarizes the literature on the performance of various extended monetary policy tools when conventional policy rates are constrained by the effective lower bound. We highlight issues that may arise when these tools are used by central banks of small open economies.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Monetary policy,
Monetary policy implementation,
Monetary policy transmission
JEL Code(s):
E,
E5,
E52,
E58,
E6,
E63