D62 - Externalities - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-19T10:02:24+00:00Stagflation and Topsy-Turvy Capital Flows
https://www.bankofcanada.ca/2022/11/staff-working-paper-2022-46/
Unregulated capital flows are likely excessive during a stagflation episode, owing to a macroeconomic externality operating through the economy’s supply side. Inflows raise domestic wages and cause unwelcome upward pressure on firm costs, yet market forces likely generate such inflows. Optimal capital flow management instead requires net outflows.2022-11-10T10:24:04+00:00enStagflation and Topsy-Turvy Capital Flows2022-11-10Inflation and pricesInternational financial marketsInternational topicsMonetary policyStaff Working Paper 2022-46https://www.bankofcanada.ca/wp-content/uploads/2022/11/swp2022-46.pdfStaff Working Paper 2022-46Julien BenguiLouphou CoulibalyNovember 2022DD6D62EE5E52FF3F32F38F4F41Are Bank Bailouts Welfare Improving?
https://www.bankofcanada.ca/2021/11/staff-working-paper-2021-56/
Financial sector bailouts, while potentially beneficial during a crisis, might lead to excessive risk taking if anticipated. Taking expectations and aggregate risk implications into account, we show that bailouts can be welfare improving, but only if capital adequacy constraints are sufficiently tight.2021-11-09T15:51:59+00:00enAre Bank Bailouts Welfare Improving?2021-11-09Financial institutionsFinancial stabilityFinancial system regulation and policiesStaff Working Paper 2021-56https://www.bankofcanada.ca/wp-content/uploads/2021/11/swp2021-56.pdfStaff Working Paper 2021-56Malik ShukayevAlexander UeberfeldtNovember 2021DD6D62EE3E32E4E44GG0G01A Macroprudential Theory of Foreign Reserve Accumulation
https://www.bankofcanada.ca/2019/10/staff-working-paper-2019-43/
This paper proposes a theory of foreign reserves as macroprudential policy. We study an open-economy model of financial crises in which pecuniary externalities lead to overborrowing, and show that by accumulating international reserves, the government can achieve the constrained-efficient allocation.2019-10-03T11:50:21+00:00enA Macroprudential Theory of Foreign Reserve Accumulation2019-10-03Balance of payments and componentsFinancial stabilityFinancial system regulation and policiesForeign reserves managementInternational financial marketsStaff Working Paper 2019-43https://www.bankofcanada.ca/wp-content/uploads/2019/10/swp2019-43.pdfA Macroprudential Theory of Foreign Reserve AccumulationFernando ArceJulien BenguiJavier BianchiOctober 2019DD5D52D6D62FF3F34Monetary Policy Tradeoffs Between Financial Stability and Price Stability
https://www.bankofcanada.ca/2016/11/staff-working-paper-2016-49/
We analyze the impact of interest rate policy on financial stability in an environment where banks can experience runs on their short-term liabilities, forcing them to sell assets at fire-sale prices.2016-11-02T10:51:25+00:00enMonetary Policy Tradeoffs Between Financial Stability and Price Stability2016-11-02Financial stabilityMonetary policy frameworkMonetary policy transmissionStaff Working Paper 2016-49https://www.bankofcanada.ca/wp-content/uploads/2016/11/swp2016-49.pdfMonetary Policy Tradeoffs Between Financial Stability and Price StabilityMalik ShukayevAlexander UeberfeldtNovember 2016DD6D62EE3E32E4E44GG0G01