Staff working papers
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Bank Failures and Bank Fundamentals: A Comparative Analysis of Latin America and East Asia during the Nineties using Bank-Level Data
The author develops the first comparative empirical study of bank failures during the nineties between East Asia and Latin America using bank-level data, in order to address the following two questions: (i) To what extent did individual bank conditions explain bank failures? (ii) Did mainly the weakest banks, in terms of their fundamentals, fail in the crisis countries? -
Lines of Credit and Consumption Smoothing: The Choice between Credit Cards and Home Equity Lines of Credit
The author models the choice between credit cards and home equity lines of credit (HELOCs) within a framework where consumers hold lines of credit as instruments of consumption smoothing across state and time. -
Risk Perceptions and Attitudes
Changes in risk perception have been used in various contexts to explain shorter-term developments in financial markets, as part of a mechanism that amplifies fluctuations in financial markets, as well as in accounts of "irrational exuberance." -
Endogenous Central Bank Credibility in a Small Forward-Looking Model of the U.S. Economy
The linkages between inflation and the economy's cyclical position are thought to be strongly affected by the credibility of monetary authorities. -
Learning-by-Doing or Habit Formation?
In a recent paper, Chang, Gomes, and Schorfheide (2002) extend the standard real business cycle (RBC) model to allow for a learning-by-doing (LBD) mechanism whereby current labour supply affects future productivity. -
Labour Market Adjustments to Exchange Rate Fluctuations: Evidence from Canadian Manufacturing Industries
The authors provide some of the first empirical evidence on labour market adjustments to exchange rate movements in Canadian manufacturing industries. -
Efficiency and Economies of Scale of Large Canadian Banks
The authors measure the economies of scale of Canada's six largest banks and their costefficiency over time. Using a unique panel data set from 1983 to 2003, they estimate pooled translog cost functions and derive measures of relative efficiency and economies of scale. -
Do Exchange Rates Affect the Capital-Labour Ratio? Panel Evidence from Canadian Manufacturing Industries
Using industry-level data for Canadian manufacturing industries from 1981 to 1997, the authors find empirical evidence of a negative relationship between the capital-labour ratio and the user cost of capital relative to the price of labour. -
An Analysis of Closure Policy under Alternative Regulatory Structures
The author develops a theoretical model of bank closure. The regulatory decision about bank failure consists of two parts: whether to close and how to close.