D - Microeconomics

• Communicating the Future Direction of Policy

  Staff analytical paper 2026-16 Jonathan Witmer, Monica Jain

  This note discusses several ways the BoC could increase communication around future policy, leveraging methods other central banks have used, and discussing the pros and cons of each method for the BoC, keeping in mind that policy rate forecasts typically are not informative beyond 1 or 2 quarters.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D8, D83, E, E5, E58 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation

• Supply Shocks in the Fog: The Role of Endogenous Uncertainty

  Staff working paper 2026-12 Anastasiia Antonova, Mykhailo Matvieiev, Celine Poilly

  Recessions feature elevated uncertainty. We develop a nonlinear imperfect-information New Keynesian model where procyclical information quality generates endogenous countercyclical uncertainty and precautionary saving. This demand channel can overturn the inflationary impact of negative supply shocks, making them deflationary, unless monetary policy stabilizes the output gap.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D8, D81, D83, E, E2, E21, E3, E32, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission

• Public vs. Private Payment Platforms: Market Impacts and Optimal Policy

  Staff working paper 2026-10 Youming Liu, Francisco Rivadeneyra, Edona Reshidi

  We study the competition between a welfare-maximizing public payment platform (e.g., CBDC or fast payment system) and a profit-maximizing private platform in a two-sided market, deriving optimal public pricing and showing how network effects, fragmentation, and policy mandates like zero fees or cost recovery shape welfare, usage, and fee incidence.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D4, E, E4, E42, E5, E58 Research Theme(s): Money and payments, Digital assets and fintech, Payment and financial market infrastructures, Retail payments

• I Am So Tired! I Don’t Know What to Do! Survey Fatigue and Financial Literacy: Results from a Randomized Experiment

  Staff working paper 2026-5 Anna Chernesky, Kim Huynh, Marcel Voia

  We use a randomization of question placement in surveys to estimate the causal effect on financial literacy results. We find that financial literacy questions placed at the end of a survey lead to a drop in financial literacy of 5%–15%. This research suggests a measure of financial literacy adapted for survey length.

  Content Type(s): Staff research, Staff working papers JEL Code(s): C, C8, C81, C83, D, D1, D12, G, G5, G53 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes, Digital assets and fintech, Payment and financial market infrastructures, Retail payments

• How Do Some Lower-Income Canadians Pay

  Staff analytical paper 2026-6 Jerry Buckland, Christopher Henry, Wendy Nur, Aidan Romanow-Bear, Stephen Wild

  Previous research suggests that lower-income Canadians may have unique experiences with the use of payments, including the use of cash and digital payments. We conduct a case study using data from [the Canadian Financial Diaries project/Canadian financial diaries] to gain insight into how some lower-income Canadians pay.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D8, D83, E, E4, E41 Research Theme(s): Money and payments, Cash and bank notes, Retail payments

• Information, Prices and Buyer Entry

  Staff working paper 2026-4 Mei Dong, Janet Hua Jiang, Ling Sun

  In markets with costly buyer entry, information transparency about prices draws in buyers, increasing demand-side competition and putting upward pressure on prices. We show that this buyer entry effect may dominate seller competition as emphasized by conventional wisdom and prices and markups may rise with information transparency.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D4, D40, D8, D83, L, L1, L11 Research Theme(s): Models and tools, Economic models

• Consumers’ Path to Mortgage Delinquency

  Staff analytical paper 2026-3 Laura Zhao, Jia Qi Xiao, Aidan Witts

  Analyzing TransUnion data from 2015–2024, this study identifies a systematic timeline of distress where rising credit utilization and non-mortgage arrears precede mortgage delinquency by up to two years. This deterioration intensifies in the final six months, providing a robust suite of high-frequency indicators for monitoring emerging household stress.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D1, D14, G, G2, G21, G5, G51 Research Theme(s): Financial system, Financial system regulation and oversight, Household and business credit

• Extraordinary Forward Guidance in Canada During the Pandemic

  Staff analytical paper 2026-1 Christopher S. Sutherland

  We consider two trade-offs inherent to extraordinary forward guidance (EFG): potency versus flexibility, and the credibility of forward guidance versus the credibility of inflation targeting. We argue that the form of EFG used by the Bank of Canada during the COVID‑19 pandemic balanced both trade-offs relatively well.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D3, D8, D83, D84, E, E3, E37, E5, E52, E58 Research Theme(s): Monetary policy, Monetary policy tools and implementation