Posts

• December 31, 2022

  Research Update - December 2022

  This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.

  Content Type(s): Staff research, Research newsletters

• 2021 Methods-of-Payment Survey Report

  Staff Discussion Paper 2022-23 Christopher Henry, Matthew Shimoda, Julia Zhu

  We present results from the 2021 Methods-of-Payment Survey, including updated payment shares. We highlight long-term trends and provide additional context for results with respect to the COVID-19 pandemic.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Coronavirus disease (COVID-19), Digital currencies and fintech, Financial services JEL Code(s): D, D8, D83, E, E4, E41

• Improving the Efficiency of Payments Systems Using Quantum Computing

  Staff Working Paper 2022-53 Christopher McMahon, Donald McGillivray, Ajit Desai, Francisco Rivadeneyra, Jean-Paul Lam, Thomas Lo, Danica Marsden, Vladimir Skavysh

  We develop an algorithm and run it on a hybrid quantum annealing solver to find an ordering of payments that reduces the amount of system liquidity necessary without substantially increasing payment delays.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Financial institutions, Financial services, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): C, C6, C61, C63, D, D8, D83, E, E4, E42, E5, E58
• December 21, 2022

  Call for papers: Themed issue in the Journal of Econometrics

  A themed issue in the Journal of Econometrics invites paper submissions on “Machine learning for economic policy” by May 31, 2023.

  Content Type(s): Press, Announcements

• Are Temporary Oil Supply Shocks Real?

  Staff Working Paper 2022-52 Johan Brannlund, Geoffrey R. Dunbar, Reinhard Ellwanger

  Hurricanes disrupt oil production in the Gulf of Mexico because producers shut in oil platforms to safeguard lives and prevent damage. We examine the effects of these temporary oil supply shocks on real economic activity in the United States.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Inflation and prices JEL Code(s): E, E3, E31, E32, Q, Q3, Q31, Q4, Q41, Q43

• Financial Constraints and Corporate Investment in China

  Staff Discussion Paper 2022-22 Kun Mo, Michel Soudan

  Financial constraints deter firms from pursuing optimal investment plans. In China, we find privately owned firms face greater financial constraints than state-owned enterprises (SOEs). This can be explained by our finding that lenders appear less concerned about the credit risk of SOEs, which causes distortions in the allocation of credit.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial markets, Firm dynamics JEL Code(s): E, E2, E22, G, G1, G3

• 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 Research 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

• Potential benefits and key risks of fiat-referenced cryptoassets

  Staff Analytical Note 2022-20 Hugh Ding, Natasha Khan, Bena Lands, Cameron MacDonald, Laura Zhao

  Cryptoassets that reference a national currency (commonly known as stablecoins) aim to peg their value to the reference currency and typically use a reserve of traditional financial assets to maintain the peg. The market value of these fiat-referenced cryptoassets has grown more than thirtyfold between early 2020 and mid-2022. We explore some of their potential benefits and key risks.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Digital currencies and fintech, Financial institutions, Financial markets, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): E, E4, G, G2, G28, L, O, O3
• December 19, 2022

  Bank of Canada announces increases to the dealer and round limits for Overnight Repo operations

  Effective Monday, December 19, 2022, limits for Overnight Repo (OR) operations will increase to $1 billion for each eligible participant.

  Content Type(s): Press, Market notices Source(s): Overnight repo operations

• The Relative Benefits and Risks of Stablecoins as a Means of Payment: A Case Study Perspective

  Staff Discussion Paper 2022-21 Annetta Ho, Sriram Darbha, Yuliya Gorelkina, Alejandro García

  Our paper contributes to the discussion about the utility of stablecoins for retail payments through an objective, evidence-based approach that compares stablecoins with traditional retail payment methods. The paper also provides insights that could be useful in the design of central bank digital currencies.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Digital currencies and fintech, Payment clearing and settlement systems JEL Code(s): D, D7, D78, O, O3, O38