D - Microeconomics
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How big is cash-futures basis trading in Canada’s government bond market?
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. -
Central Bank Liquidity Policy in Modern Times
Across several dimensions of lender of last resort policy, I highlight broad changes that have occurred since the 2008–09 global financial crisis and discuss some of the key challenges, choices and considerations facing the designers of central bank liquidity tools today. -
Impacts of interest rate hikes on the consumption of households with a mortgage
We assess how much the recent rate-hike cycle has and will affect mortgage borrowers' consumption through its impacts on mortgage payments. Our analysis provides insights into the effects of changes in monetary policy on the consumption of mortgage borrowers. -
The Role of Beliefs in Entering and Exiting the Bitcoin Market
We develop a model that links investors’ decisions to enter or exit the Bitcoin market with their beliefs about the survival of Bitcoin. Empirical testing using Canadian data reveals that beliefs strongly influence both entries and exits, and this impact varies with time and ownership status. -
Saving after Retirement and Preferences for Residual Wealth
We estimate a model of households in Norway with bequest motives, health-dependent utility, and uncertain longevity and health. Our estimates imply strong bequest motives for households both with and without offspring. We interpret this as suggestive evidence that utility from residual wealth represents forces beyond an altruistic bequest motive. -
Markups and Inflation in Oligopolistic Markets: Evidence from Wholesale Price Data
We study how the interaction of market power and nominal price rigidity influences inflation dynamics. We find that pass-through declines with price stickiness when markets are concentrated, which implies a lower slope of the New Keynesian Phillips curve. -
Total factor productivity growth projection for Canada: A sectoral approach
We propose a tool that decomposes TFP growth into sectoral contributions. The analysis incorporates three structural factors—digitalization, aging and climate change policies—and measures their contributions. Overall, we expect that aggregate TFP growth will slow down in the 2020s below both its historical average and the average from the 2010s. -
Survey of Indigenous Firms: A Snapshot of Wages, Prices and Financing in the Indigenous Business Sector in Canada
What sources of financing do Indigenous-owned businesses in Canada use, and what are their expectations about prices, wages and inflation? We find Indigenous-owned firms are significantly less reliant on financial institutions as sources of financing compared with non-Indigenous firms. We also find Indigenous-owned firms have higher inflation expectations and weaker wage-growth expectations. -
Digital Payments in Firm Networks: Theory of Adoption and Quantum Algorithm
We build a network formation game of firms with trade flows to study the adoption and usage of a new digital currency as an alternative to correspondent banking.