D1 - Household Behavior and Family Economics

• Reassessing the Growth of HELOCs in Canada Using New Regulatory Data

  Staff analytical note 2019-14 Leila Al-Mqbali, Olga Bilyk, Stefan Caputo, James Younker

  Using new regulatory data on residential secured lending from Canadian banks, we assess the growth rate of home equity lines of credit (HELOCs).

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, G, G2, G21, G28 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit

• Inequality in Parental Transfers and Optimal Need-Based Financial Aid

  Staff working paper 2019-7 Youngmin Park

  This paper studies optimal need-based financial aid when parental transfers—unobserved by policymakers—vary across and within families of similar means. Using data on U.S. college students, I document substantial inequality in parental transfers, especially among wealthier families. I then analyze how this affects aid design aimed at reducing inefficiencies from borrowing constraints and the aid itself.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, D14, D6, D61, D64, D8, D82, I, I2, I22, J, J2, J24 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply

• The Impact of Recent Policy Changes on the Canadian Mortgage Market

  Staff analytical note 2018-35 Olga Bilyk, Maria teNyenhuis

  Recent policy changes are having a clear impact on the mortgage market. The number of new, highly indebted borrowers has fallen, and overall mortgage activity has slowed significantly.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, E, E4, G, G2, G21, G28 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial system regulation and oversight, Household and business credit

• The Framework for Risk Identification and Assessment

  Technical report No. 113 Cameron MacDonald, Virginie Traclet

  Risk assessment models are an important component of the Bank’s analytical tool kit for assessing the resilience of the financial system. We describe the Framework for Risk Identification and Assessment (FRIDA), a suite of models developed at the Bank of Canada to quantify the impact of financial stability risks to the broader economy and a range of financial system participants (households, businesses and banks).

  Content Type(s): Staff research, Technical reports JEL Code(s): C, C3, C5, C6, C7, D, D1, E, E0, E00, E2, E27, E3, E37, E4, E47, G, G0, G2, G21 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Models and tools, Economic models

• A Look Inside the Box: Combining Aggregate and Marginal Distributions to Identify Joint Distributions

  Staff working paper 2018-29 Marie-Hélène Felt

  This paper proposes a method for estimating the joint distribution of two or more variables when only their marginal distributions and the distribution of their aggregates are observed. Nonparametric identification is achieved by modelling dependence using a latent common-factor structure.

  Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C14, D, D1, D14, E, E4, E41 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes

• Interest Rate and Renewal Risk for Mortgages

  Staff analytical note 2018-18 Olga Bilyk, Cameron MacDonald, Brian Peterson

  In this note, we explore two types of risk faced by holders of mortgages and home equity lines of credit (HELOCs) in the context of rising interest rates: interest rate risk and renewal risk.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, E, E4, E5, G, G2, G21, G28 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit

• Did U.S. Consumers Respond to the 2014–2015 Oil Price Shock? Evidence from the Consumer Expenditure Survey

  Staff working paper 2018-13 Patrick Alexander, Louis Poirier

  The impact of oil price shocks on the U.S. economy is a topic of considerable debate. In this paper, we examine the response of U.S. consumers to the 2014–2015 negative oil price shock using representative survey data from the Consumer Expenditure Survey.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, D12, E, E2, E21, Q, Q4, Q43 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting

• Home Equity Extraction and the Boom-Bust Cycle in Consumption and Residential Investment

  Staff working paper 2018-6 Xiaoqing Zhou

  The consumption boom-bust cycle in the 2000s coincided with large fluctuations in the volume of home equity borrowing. Contrary to conventional wisdom, I show that homeowners largely borrowed for residential investment and not consumption.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, E, E2, E3 Research Theme(s): Financial system, Household and business credit, Models and tools, Economic models, Monetary policy, Real economy and forecasting

• Merchant Acceptance of Cash and Credit Cards at the Point of Sale

  Staff analytical note 2018-1 Ben Fung, Kim Huynh, Kerry Nield, Angelika Welte

  Recent data show that the use of credit cards in Canada has been increasing, while the use of cash has been declining. At the same time, only two-thirds of small or medium-sized businesses accept credit cards.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C2, D, D1, E, E4, E41 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes, Retail payments

• Recent Evolution of Canada’s Credit-to-GDP Gap: Measurement and Interpretation

  Staff analytical note 2017-25 Timothy Grieder, Dylan Hogg, Thibaut Duprey

  Over the past several years, the Bank for International Settlements has noted that Canada’s credit-to-GDP gap has widened and is above thresholds indicating future banking stress.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, E, E3, E32, G, G0, G01, G1, G2, G21, G3, G30 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit