E21 - Consumption; Saving; Wealth - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-29T09:51:10+00:00How changes in the share of constrained households affect the effectiveness of monetary policy
https://www.bankofcanada.ca/2024/02/staff-analytical-note-2024-3/
We measure how the change in the share of constrained households in Canada following the COVID-19 recession has impacted the effectiveness of monetary policy.2024-02-21T14:06:06+00:00enHow changes in the share of constrained households affect the effectiveness of monetary policy2024-02-21Perceived versus Calibrated Income Risks in Heterogeneous-Agent Consumption Models
https://www.bankofcanada.ca/2023/12/staff-working-paper-2023-59/
Perceived income risks reported in a survey of consumer expectations are more heterogeneous and, on average, lower than indirectly calibrated risks based on panel data. They prove to be one explanation for why a large fraction of households hold very little liquid savings and why accumulated wealth is widely unequal across households.2023-12-27T11:44:56+00:00enPerceived versus Calibrated Income Risks in Heterogeneous-Agent Consumption Models2023-12-27Business fluctuations and cyclesMonetary policyMonetary policy and uncertaintyStaff Working Paper 2023-59https://www.bankofcanada.ca/wp-content/uploads/2023/12/swp2023-59.pdfPerceived versus Calibrated Income Risks in Heterogeneous-Agent Consumption ModelsTao WangDecember 2023DD1D14EE2E21E7E71GG5G51The Macroeconomic Effects of Debt Relief Policies During Recessions
https://www.bankofcanada.ca/2023/08/staff-working-paper-2023-48/
A large-scale reduction in mortgage principal can strengthen a recovery, support house prices and lower foreclosures. The nature of the intervention shapes its impact, which rests on how resources are redistributed across households. The availability of bankruptcy on unsecured debt changes the response to large-scale mortgage relief by reducing precautionary savings.2023-08-28T11:39:12+00:00enThe Macroeconomic Effects of Debt Relief Policies During Recessions2023-08-28Business fluctuations and cyclesCredit and credit aggregatesDebt managementHousingStaff Working Paper 2023-48https://www.bankofcanada.ca/wp-content/uploads/2023/08/swp2023-48.pdfThe Macroeconomic Effects of Debt Relief Policies During RecessionsSoyoung LeeAugust 2023EE2E21E3E32E6The Impact of Unemployment Insurance and Unsecured Credit on Business Cycles
https://www.bankofcanada.ca/2023/04/staff-working-paper-2023-22/
This paper studies how unsecured consumer credit impacts the extent to which unemployment insurance (UI) policies smooth aggregate consumption fluctuations over the business cycle. Using a general equilibrium real business cycle model, I find that unsecured credit amplifies the extent to which UI smooths cyclical consumption fluctuations.2023-04-13T11:15:08+00:00enThe Impact of Unemployment Insurance and Unsecured Credit on Business Cycles2023-04-13Business fluctuations and cyclesCredit and credit aggregatesEconomic modelsFiscal policyLabour marketsStaff Working Paper 2023-22https://www.bankofcanada.ca/wp-content/uploads/2023/04/swp2023-22.pdfStaff Working Paper 2023-22Michael IrwinApril 2023EE2E21E24E3E32E4E44E6E62The Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model
https://www.bankofcanada.ca/2023/02/staff-discussion-paper-2023-5/
We use a small open economy model with overlapping generations to evaluate secular dynamics of the neutral rate in Canada from 1980 to 2018. We find that changes in both foreign and domestic factors resulted in a protracted decline in the neutral rate.2023-02-21T16:42:36+00:00enThe Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model2023-02-21Economic modelsInterest ratesMonetary policyStaff Discussion Paper 2023-5https://www.bankofcanada.ca/wp-content/uploads/2023/02/sdp2023-5.pdfStaff Discussion Paper 2023-5Martin KunclDmitry MatveevFebruary 2023EE2E21E22E4E43E5E50E52E58FF4F41Fiscal Stimulus and Skill Accumulation over the Life Cycle
https://www.bankofcanada.ca/2023/01/staff-working-paper-2023-9/
Using micro data from the U.S. Consumer Expenditure Survey and Current Population Survey, I document that government spending shocks affect individuals differently over the life cycle.2023-01-30T10:26:17+00:00enFiscal Stimulus and Skill Accumulation over the Life Cycle2023-01-30Business fluctuations and cyclesFiscal policyProductivityStaff Working Paper 2023-9https://www.bankofcanada.ca/wp-content/uploads/2023/01/swp2023-9.pdfFiscal Stimulus and Skill Accumulation over the Life CycleLaure SimonJanuary 2023DD1D12D15EE2E21E6E62JJ1J11J2J24Gazing at r-star: A Hysteresis Perspective
https://www.bankofcanada.ca/2023/01/staff-working-paper-2023-5/
Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to show that the major change driving household asset demand over this period is instead an increased desire—for a given age and income level—to hold assets.2023-01-12T09:46:25+00:00enGazing at r-star: A Hysteresis Perspective2023-01-12Economic modelsFiscal policyInflation and pricesInflation targetsInterest ratesMonetary policyMonetary policy frameworkStaff Working Paper 2023-5https://www.bankofcanada.ca/wp-content/uploads/2023/01/swp2023-5.pdfGazing at r-star: A Hysteresis PerspectivePaul BeaudryKatya KartashovaCésaire MehJanuary 2023EE2E21E3E31E4E43E5E52E58E6E62GG5G51HH6Macroeconomic Disasters and Consumption Smoothing: International Evidence from Historical Data
https://www.bankofcanada.ca/2023/01/staff-working-paper-2023-4/
Does consumption smoothing fundamentally decrease during macroeconomic disasters? This paper uses a large historical dataset (1870–2016) for 16 industrial economies to show that during macroeconomic disasters (e.g., wars, pandemics, depressions) aggregate consumption and income are significantly less decoupled than during normal times.2023-01-10T16:00:41+00:00enMacroeconomic Disasters and Consumption Smoothing: International Evidence from Historical Data2023-01-10Business fluctuations and cyclesCoronavirus disease (COVID-19)Econometric and statistical methodsStaff Working Paper 2023-4https://www.bankofcanada.ca/wp-content/uploads/2023/01/swp2023-4.pdfStaff Working Paper 2023-4Lorenzo PozziBarbara SadabaJanuary 2023CC2C23EE2E21Windfall Income Shocks with Finite Planning Horizons
https://www.bankofcanada.ca/2022/09/staff-working-paper-2022-40/
How do households respond when they receive unanticipated income, such as an inheritance or government stimulus cheque? This paper studies these windfall income shocks through a model of household behaviour that generates a realistic consumption response for households along the entire distribution of wealth.2022-09-20T08:47:42+00:00enWindfall Income Shocks with Finite Planning Horizons2022-09-20Domestic demand and componentsEconomic modelsFiscal policyStaff Working Paper 2022-40https://www.bankofcanada.ca/wp-content/uploads/2022/09/swp2022-40.pdfWindfall Income Shocks with Finite Planning HorizonsMichael BoutrosSeptember 2022DD9D91EE2E21GG5G51How Do People View Price and Wage Inflation?
https://www.bankofcanada.ca/2022/07/staff-working-paper-2022-34/
This paper examines household-level data from the Canadian Survey of Consumer Expectations (CSCE) to understand households’ expectations about price and wage inflation, how those expectations link to views about labour market conditions and the subsequent impact on households’ outlook for real spending growth.2022-07-22T12:45:13+00:00enHow Do People View Price and Wage Inflation?2022-07-22Inflation and pricesMonetary policy communicationsStaff Working Paper 2022-34https://www.bankofcanada.ca/wp-content/uploads/2022/07/swp2022-34.pdfStaff Working Paper 2022-34Monica JainOlena KostyshynaXu ZhangJuly 2022CC8C83DD8D84EE2E21E24E3E31