E50 - General
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Uncertainty, Inflation, and Welfare
This paper studies the welfare costs and the redistributive effects of inflation in the presence of idiosyncratic liquidity risk, in a micro-founded search-theoretical monetary model. We calibrate the model to match the empirical aggregate money demand and the distribution of money holdings across households, and study the effects of inflation under the implied degree of market incompleteness. -
Endogenously Segmented Asset Market in an Inventory Theoretic Model of Money Demand
This paper studies the effects of monetary policy in an inventory theoretic model of money demand. In this model, agents keep inventories of money, despite the fact that money is dominated in rate of return by interest bearing assets, because they must pay a fixed cost to transfer funds between the asset market and the goods market. -
Liquidity, Redistribution, and the Welfare Cost of Inflation
This paper studies the long run welfare costs of inflation in a micro-founded model with trading frictions and costly liquidity management. -
Cross-Country Estimates of the Degree of Fiscal Dominance and Central Bank Independence
This paper studies the interdependence between fiscal and monetary policies, and their joint role in the determination of the price level. -
Uncollateralized Overnight Loans Settled in LVTS
Loan-level data on the uncollateralized overnight loan market is generated using payment data from Canada's Large Value Transfer System (LVTS) and a modified version of the methodology proposed in Furfine (1999). There were on average just under 100 loans extended in this market each day from March 2004 to March 2006 for a total daily value of about $5 billion. -
ToTEM: The Bank of Canada's New Quarterly Projection Model
The authors provide a detailed technical description of the Terms-of-Trade Economic Model (ToTEM), which replaced the Quarterly Projection Model (QPM) in December 2005 as the Bank's principal projection and policy-analysis model for the Canadian economy. -
Regime Shifts in the Indicator Properties of Narrow Money in Canada
Financial innovations and the removal of the reserve requirements in the early 1990s have made the distinction between demand and notice deposits arbitrary. -
The Exchange Rate and Canadian Inflation Targeting
The author provides a non-technical explanation of the role played by the exchange rate in Canada's inflation-targeting monetary policy. -
Money Demand and Economic Uncertainty
The author examines the impact of economic uncertainty on the demand for money.