Research - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-28T11:11:45+00:00Limited Commitment, Endogenous Credibility and the Challenges of Price-level Targeting
https://www.bankofcanada.ca/2018/12/staff-working-paper-2018-61/
This paper studies the cost of limited commitment when a central bank has the discretion to adjust policy whenever the costs of honoring its past commitments become high. Specifically, we consider a central bank that seeks to implement optimal policy in a New Keynesian model by committing to a price-level target path.2018-12-19T08:47:46+00:00enLimited Commitment, Endogenous Credibility and the Challenges of Price-level Targeting2018-12-19CredibilityInflation targetsMonetary policy frameworkStaff Working Paper 2018-61https://www.bankofcanada.ca/wp-content/uploads/2018/12/swp2018-61.pdfLimited Commitment, Endogenous Credibility and the Challenges of Price-level TargetingGino CateauMalik ShukayevDecember 2018EE3E31E5E52Inference in Games Without Nash Equilibrium: An Application to Restaurants’ Competition in Opening Hours
https://www.bankofcanada.ca/2018/12/staff-working-paper-2018-60/
This paper relaxes the Bayesian Nash equilibrium (BNE) assumption commonly imposed in empirical discrete choice games with incomplete information. Instead of assuming that players have unbiased/correct expectations, my model treats a player’s belief about the behavior of other players as an unrestricted unknown function. I study the joint identification of belief and payoff functions.2018-12-19T08:12:56+00:00enInference in Games Without Nash Equilibrium: An Application to Restaurants’ Competition in Opening Hours2018-12-19Econometric and statistical methodsMarket structure and pricingStaff Working Paper 2018-60https://www.bankofcanada.ca/wp-content/uploads/2018/12/swp2018-60.pdfInference in Games Without Nash Equilibrium: An Application to Restaurants, Competition in Opening HoursErhao XieDecember 2018CC5C57LL1L13L8L85Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada
https://www.bankofcanada.ca/2018/12/staff-discussion-paper-2018-18/
In 1991, Canada became the second country to adopt an inflation target as a central pillar of its monetary policy framework. The regime has proven much more successful than initially expected, both in achieving price stability and in stabilizing the real economy against a wide range of shocks.2018-12-18T14:08:33+00:00enCredibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada2018-12-18CredibilityInflation targetsMonetary policyMonetary policy frameworkStaff Discussion Paper 2018-18https://www.bankofcanada.ca/wp-content/uploads/2018/12/sdp2018-18.pdfCredibility, Flexibility and Renewal: The Evolution of Inflation Targeting in CanadaThomas J. CarterRhys R. MendesLawrence L. SchembriDecember 2018EE5E52E58E6E61The Role of Corporate Saving over the Business Cycle: Shock Absorber or Amplifier?
https://www.bankofcanada.ca/2018/12/staff-working-paper-2018-59/
We document countercyclical corporate saving behavior with the degree of countercyclicality varying nonmonotonically with firm size. We then develop a dynamic stochastic general equilibrium model with heterogeneous firms to explain the pattern and study its implications for business cycles.2018-12-17T15:00:32+00:00enThe Role of Corporate Saving over the Business Cycle: Shock Absorber or Amplifier?2018-12-17Business fluctuations and cyclesEconomic modelsStaff Working Paper 2018-59https://www.bankofcanada.ca/wp-content/uploads/2018/12/swp2018-59.pdfThe Role of Corporate Saving over the Business Cycle: Shock Absorber or Amplifier?Xiaodan GaoShaofeng XuDecember 2018EE2E20E22E3E32GG3G31G322017 Methods-of-Payment Survey: Sample Calibration and Variance Estimation
https://www.bankofcanada.ca/2018/12/technical-report-114/
This technical report describes sampling, weighting and variance estimation for the Bank of Canada’s 2017 Methods-of-Payment Survey. Under quota sampling, a raking ratio method is implemented to generate weights with both post-stratification and nonparametric nonresponse weight adjustments.2018-12-14T09:59:55+00:00en2017 Methods-of-Payment Survey: Sample Calibration and Variance Estimation2018-12-14Econometric and statistical methodsTechnical Report 114https://www.bankofcanada.ca/wp-content/uploads/2018/12/tr114.pdfBond Funds and Fixed-Income Market Liquidity: A Stress-Testing ApproachHeng ChenMarie-Hélène FeltChristopher HenryDecember 2018CC8C81C832017 Methods-of-Payment Survey Report
https://www.bankofcanada.ca/2018/12/staff-discussion-paper-2018-17/
Cash use is declining while contactless and mobile payments are on the rise.2018-12-14T08:44:01+00:00en2017 Methods-of-Payment Survey Report2018-12-14Bank notesDigital currencies and fintechFinancial servicesStaff Discussion Paper 2018-17https://www.bankofcanada.ca/wp-content/uploads/2018/12/sdp2018-17.pdf2017 Methods-of-Payment Survey ReportChristopher HenryKim HuynhAngelika WelteDecember 2018DD8D83EE4E41Should the Central Bank Issue E-money?
https://www.bankofcanada.ca/2018/12/staff-working-paper-2018-58/
Should a central bank take over the provision of e-money, a circulable electronic liability? We discuss how e-money technology changes the tradeoff between public and private provision, and the tradeoff between e-money and a central bank's existing liabilities like bank notes and reserves.2018-12-13T09:55:56+00:00enShould the Central Bank Issue E-money?2018-12-13Bank notesDigital currencies and fintechFinancial servicesPayment clearing and settlement systemsStaff Working Paper 2018-58https://www.bankofcanada.ca/wp-content/uploads/2018/12/swp2018-58.pdfShould the Central Bank Issue E-money?Charles M. KahnFrancisco RivadeneyraTsz-Nga WongDecember 2018EE4E42E5E51E58The Cost of the Government Bond Buyback and Switch Programs in Canada
https://www.bankofcanada.ca/2018/12/staff-analytical-note-2018-41/
This note examines the costs of the Government of Canada bond buyback and switch programs between 1998 and 2016. Our analysis indicates that the auction design of the buyback program was effective in retiring government debt with minimal costs resulting from bid shading in auctions and price impact.2018-12-11T14:10:58+00:00enThe Cost of the Government Bond Buyback and Switch Programs in Canada2018-12-11Fundamental Drivers of Existing Home Sales in Canada
https://www.bankofcanada.ca/2018/12/staff-discussion-paper-2018-16/
Existing home sales’ share of Canada’s economic pie has been rising in recent years, and variation around this trend has resulted in outsized contributions to changes in real gross domestic product (GDP). In this context, we use a cointegration framework to estimate the level of resale activity across the Canadian provinces that is supported by fundamentals—namely, full-time employment, housing affordability and migration flows—to help look through the volatility.2018-12-10T12:04:49+00:00enFundamental Drivers of Existing Home Sales in Canada2018-12-10Econometric and statistical methodsEconomic modelsHousingStaff Discussion Paper 2018-16https://www.bankofcanada.ca/wp-content/uploads/2018/12/sdp2018-16.pdfFundamental Drivers of Existing Home Sales in CanadaTaylor WebleyDecember 2018CC2C22C23EE2E27RR2R21Alternative Futures for Government of Canada Debt Management
https://www.bankofcanada.ca/2018/12/staff-discussion-paper-2018-15/
This paper presents four blue-sky ideas for lowering the cost of the Government of Canada’s debt without increasing the debt’s risk profile. We argue that each idea would improve the secondary-market liquidity of government debt, thereby increasing the demand for government bonds and thus lowering their cost at issuance.2018-12-06T14:49:48+00:00enAlternative Futures for Government of Canada Debt Management2018-12-06Debt managementFinancial marketsMarket structure and pricingStaff Discussion Paper 2018-15https://www.bankofcanada.ca/wp-content/uploads/2018/12/sdp2018-15.pdfAlternative Futures for Government of Canada Debt ManagementCorey GarriottSophie LefebvreGuillaume NolinFrancisco RivadeneyraAdrian WaltonDecember 2018GG1G12G2G24HH6H63