E4 - Money and Interest Rates

• The Effect of Mortgage Rate Resets on Debt: Evidence from TransUnion (Part I)

  Staff analytical note 2020-2 Katya Kartashova

  This note studies how decreases in mortgage rates affect the behaviour of borrowers in terms of spending on durable goods and repaying debt.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, D12, D14, E, E4, E43, E5, E52, G, G2, G21, R, R3, R31 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission

• The Power of Helicopter Money Revisited: A New Keynesian Perspective

  Staff discussion paper 2020-1 Thomas J. Carter, Rhys R. Mendes

  We analyze money financing of fiscal transfers (helicopter money) in two simple New Keynesian models: a “textbook” model in which all money is non-interest-bearing (e.g., all money is currency), and a more realistic model with interest-bearing reserves.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E1, E12, E4, E41, E43, E5, E51, E52, E58, E6, E61, E63 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation

• Managing GDP Tail Risk

  Staff working paper 2020-3 Thibaut Duprey, Alexander Ueberfeldt

  Models for macroeconomic forecasts do not usually take into account the risk of a crisis—that is, a sudden large decline in gross domestic product (GDP). However, policy-makers worry about such GDP tail risk because of its large social and economic costs.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D8, E, E4, E44, E5, E52, E58, G, G0, G01 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission

• Contagion in Dealer Networks

  Staff working paper 2020-1 Jean-Sébastien Fontaine, Adrian Walton

  Dealers connect investors who want to buy or sell securities in financial markets. Over time, dealers and investors form trading networks to save time and resources. An emerging field of research investigates how networks form.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, G, G1, G2, G21, L, L1, L14 Research Theme(s): Financial markets and funds management, Market functioning, Market structure, Financial system, Financial institutions and intermediation, Financial stability and systemic risk

• Furor over the Fed : Presidential Tweets and Central Bank Independence

  Staff analytical note 2019-33 Antoine Camous, Dmitry Matveev

  We illustrate how market data can be informative about the interactions between monetary and fiscal policy. Federal funds futures are private contracts that reflect investor’s expectations about monetary policy decisions.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E44, E5, E52, E58 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Monetary policy, Monetary policy framework and transmission

• 2018 Merchant Acceptance Survey

  Staff analytical note 2019-31 Kim Huynh, Gradon Nicholls, Mitchell Nicholson

  In 2015, the Bank of Canada surveyed merchants and found that cash was nearly universally accepted (Fung, Huynh and Kosse 2017). Since 2015, retail payments in Canada have become increasingly digitalized, as many Canadians have adopted digital payment innovations like contactless cards and Interac e-Transfer.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C8, D, D2, D22, E, E4, L, L2 Research Theme(s): Money and payments, Cash and bank notes, Retail payments

• 2018 Bitcoin Omnibus Survey: Awareness and Usage

  Staff discussion paper 2019-10 Christopher Henry, Kim Huynh, Gradon Nicholls, Mitchell Nicholson

  The Bank of Canada continues to use the Bitcoin Omnibus Survey (BTCOS) to monitor trends in Canadians’ awareness, ownership and use of Bitcoin. The most recent iteration was conducted in late 2018, following an 85 percent decline in the price of Bitcoin throughout the year.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C1, C12, E, E4, O, O5, O51 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech

• Cashless Bank Branches in Canada

  Staff analytical note 2019-29 Walter Engert, Ben Fung

  Cashless or tellerless bank branches have proliferated in several countries in recent years. In a cashless bank branch, teller or counter services such as cash withdrawals, deposits and cheque-cashing are not available.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E41, E42, E5, E51 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech, Retail payments

• The Economics of Cryptocurrencies—Bitcoin and Beyond

  Staff working paper 2019-40 Jonathan Chiu, Thorsten Koeppl

  Since the creation of Bitcoin in 2009, over 2,000 cryptocurrencies have been issued. We evaluate how well a cryptocurrency functions as a payment system.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E5, L, L5 Research Theme(s): Monetary policy, Monetary policy tools and implementation, Money and payments, Digital assets and fintech, Payment and financial market infrastructures

• What Does Structural Analysis of the External Finance Premium Say About Financial Frictions?

  Staff working paper 2019-38 Jelena Zivanovic

  I use a structural vector autoregression (SVAR) with sign restrictions to provide conditional evidence on the behavior of the US external finance premium (EFP). The results indicate that the excess bond premium, a proxy for the EFP, reacts countercyclically to supply and monetary policy shocks and procyclically to demand shocks.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E4, E44 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission