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538
result(s)
The Role of Intermediaries in Selection Markets: Evidence from Mortgage Lending
Staff Working Paper 2023-12
Jason Allen,
Robert Clark,
Jean-François Houde,
Shaoteng Li,
Anna Trubnikova
This paper looks at the role mortgage brokers play in helping borrowers generate quotes and qualify for credit. We find that, on average, borrowers that engage with a mortgage broker pay lower interest rates. However, in about 15% of cases, borrowers are steered towards longer amortizing mortgages than they would have chosen absent a broker. Since mortgages with longer amortization have higher total interest costs over the entire life of the mortgage, this steering is expensive.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial services,
Market structure and pricing
JEL Code(s):
D,
D4,
G,
G2,
G21,
L,
L2
Fiscal Stimulus and Skill Accumulation over the Life Cycle
Staff Working Paper 2023-9
Laure Simon
Using micro data from the U.S. Consumer Expenditure Survey and Current Population Survey, I document that government spending shocks affect individuals differently over the life cycle.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Fiscal policy,
Productivity
JEL Code(s):
D,
D1,
D12,
D15,
E,
E2,
E21,
E6,
E62,
J,
J1,
J11,
J2,
J24
Risk Amplification Macro Model (RAMM)
Technical Report No. 123
Kerem Tuzcuoglu
The Risk Amplification Macro Model (RAMM) is a new nonlinear two-country dynamic model that captures rare but severe adverse shocks. The RAMM can be used to assess the financial stability implications of both domestic and foreign-originated risk scenarios.
Content Type(s):
Staff research,
Technical reports
Topic(s):
Business fluctuations and cycles,
Econometric and statistical methods,
Financial stability,
Monetary policy transmission
JEL Code(s):
C,
C5,
C51,
E,
E3,
E37,
E4,
E44,
F,
F4,
F44
The 2021–22 Surge in Inflation
Staff Discussion Paper 2023-3
Oleksiy Kryvtsov,
James (Jim) C. MacGee,
Luis Uzeda
The rise in inflation in 2021–22 sparked a growing literature and debate over the causes of the surge as well as the near- and medium-term path for inflation. This review offers three key messages.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Inflation and prices,
Inflation targets,
Monetary policy
JEL Code(s):
E,
E3,
E31,
E5,
E52,
E58
Gazing at r-star: A Hysteresis Perspective
Staff Working Paper 2023-5
Paul Beaudry,
Katya Kartashova,
Césaire Meh
Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to show that the major change driving household asset demand over this period is instead an increased desire—for a given age and income level—to hold assets.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Fiscal policy,
Inflation and prices,
Inflation targets,
Interest rates,
Monetary policy,
Monetary policy framework
JEL Code(s):
E,
E2,
E21,
E3,
E31,
E4,
E43,
E5,
E52,
E58,
E6,
E62,
G,
G5,
G51,
H,
H6
Geographical and Cultural Proximity in Retail Banking
Staff Working Paper 2023-2
Santiago Carbo-Valverde,
Héctor Pérez Saiz,
Hongyu Xiao
This paper measures how both geographical and cultural proximity of bank branches affect household credit choice and pricing. For credit products that require high levels of ex-ante screening, we find that both proximities can complement each other in reducing the cost of providing soft information, thereby increasing credit access.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Credit and credit aggregates,
Financial institutions,
Financial services
JEL Code(s):
D,
D8,
D82,
D83,
G,
G2,
G20,
G21,
R,
R2,
R22,
Z,
Z1,
Z10,
Z13
CANVAS: A Canadian Behavioral Agent-Based Model
Staff Working Paper 2022-51
Cars Hommes,
Mario He,
Sebastian Poledna,
Melissa Siqueira,
Yang Zhang
The Bank of Canada’s current suite of models faces challenges in addressing network effects that integrate household and firm-level heterogeneity and their behaviours. We develop CANVAS, a Canadian behavioural agent-based model to contribute to the Bank’s next-generation modelling effort. CANVAS improves forecasting performance and expands capacity for model-based scenario analysis.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Econometric and statistical methods,
Economic models,
Firm dynamics,
Inflation and prices
JEL Code(s):
C,
D,
D2,
D22,
D8,
D83,
E,
E1,
E17
Regulatory Requirements of Banks and Arbitrage in the Post-Crisis Federal Funds Market
Staff Working Paper 2022-48
Rodney J. Garratt,
Sofia Priazhkina
This paper explains the nature of interest rates in the U.S. federal funds market after the 2007-09 financial crisis. We build a model of the over-the-counter lending market that incorporates new aspects of the financial system: abundance of liquidity, different regulatory standards for banks, and arbitrage opportunities created by limited access to the facility granting interest on excess reserves.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Economic models,
Financial institutions,
Financial markets,
Financial stability,
Financial system regulation and policies,
Wholesale funding
JEL Code(s):
E,
E4,
E42,
E5,
E58,
G,
G2,
G28
Are Working Hours Complements in Production?
Staff Working Paper 2022-47
Lin Shao,
Faisal Sohail,
Emircan Yurdagul
Using Canadian matched employer-employee data, we show that working hours of different workers are gross complements in production rather than perfect substitutes, as is typically assumed by macroeconomic models of production.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Labour markets
JEL Code(s):
E,
E2,
E23,
J,
J2,
J22,
J23,
J3,
J31