Staff research

• The Ecology of Automated Market Makers

  Staff discussion paper 2024-12 Annetta Ho, Cosmin Cazan, Andrew Schrumm

  This paper describes the ecology of automated market makers, which are the most popular decentralized exchange model for the pricing and trading of crypto assets within decentralized finance.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): G, G1, G2 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Financial system regulation and oversight, Money and payments, Digital assets and fintech

• The Role of Public Money in the Digital Age

  Staff discussion paper 2024-11 Francisco Rivadeneyra, Scott Hendry, Alejandro García

  A well-functioning monetary system is characterized by public and private forms of money that exchange at par as value flows freely between them. A relevant retail public money—whether in the form of cash, a central bank digital currency or both—is a necessary component of such a monetary system.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E4, E42, E5, E50, E58 Research Theme(s): Money and payments, Digital assets and fintech, Payment and financial market infrastructures, Retail payments

• Untapped Potential: Mobile Device Ownership and Mobile Payments in Canada

  Staff working paper 2024-25 Marie-Hélène Felt, Angelika Welte, Katrina Talavera

  We present a two-stage model of mobile phone and mobile payment usage that controls for selectivity. This reveals unobserved factors that work against having a mobile phone and toward mobile paying. Therefore, people who are unable to acquire or choose not to own a mobile device might have unmet payment needs.

  Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C39, D, D1, D12, E, E4, E42 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Digital assets and fintech, Retail payments

• Analysis of DeFi Oracles

  Staff discussion paper 2024-10 Xun Deng, Sidi Mohamed Beillahi, Cyrus Minwalla, Han Du, Andreas Veneris, Fan Long

  Oracles are constructs used in decentralized finance to price assets relative to each other. However, oracles contain defects that could lead to manipulation attacks. Such attacks exploit pricing models embedded within oracles to defraud creators and users. We automatically verify defects, which if mitigated, improves the security of digital currency.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E4, E42, E5, E51, G, G1, G15, O, O3, O31 Research Theme(s): Financial system, Financial stability and systemic risk, Money and payments, Digital assets and fintech, Payment and financial market infrastructures

• Deriving Longer-Term Inflation Expectations and Inflation Risk Premium Measures for Canada

  Staff discussion paper 2024-9 Bruno Feunou, Zabi Tarshi

  We present two models for long-term inflation expectations and inflation risk premiums for Canada.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C5, C58, E, E4, E43, E47, G, G1, G12 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission

• 2023 Methods-of-Payment Survey Report: The Resilience of Cash

  Staff discussion paper 2024-8 Christopher Henry, Matthew Shimoda, Doina Rusu

  We present key results from the 2023 Methods-of-Payment Survey. Results show that measures of cash management and use have remained stable since 2020, and that Canadians increased their adoption of payment alternatives such as mobile apps in 2023.

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

• The Output-Inflation Trade-off in Canada

  Staff discussion paper 2024-7 Stefano Gnocchi, Fanny McKellips, Rodrigo Sekkel, Laure Simon, Yinxi Xie, Yang Zhang

  We explain how the Bank of Canada’s policy models capture the trade-off between output and inflation in Canada. We provide new estimates of the trade-off and contrast them with those in the Bank’s macroeconomic models.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E3, E31, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
• June 30, 2024

  Quarterly Research Update – 2024 Q2

  This 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

• How big is cash-futures basis trading in Canada’s government bond market?

  Staff analytical note 2024-16 Andreas Uthemann, Rishi Vala

  Cash-futures basis trading has grown alongside the Government of Canada bond futures market. We examine this growth over time in relation to Government of Canada bond and repurchase agreement markets and provide details on the type of market participants that engage in this type of trading activity.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D4, D47, D5, D53, G, G1, G12, G2, G23 Research Theme(s): Financial markets and funds management, Market functioning, Market structure, Financial system, Financial stability and systemic risk

• Non-bank financial intermediation: Canada’s submission to the 2023 global monitoring report

  Staff analytical note 2024-15 Malcolm Fisher, Alan Walsh

  We share insights from Canadian data from 2002 to 2022 that the Bank of Canada collected. The Bank submits these data each year to the Financial Stability Board for inclusion in its Global Monitoring Report on Non-Bank Financial Intermediation.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G2, G21, G22, G23 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk