F4 - Macroeconomic Aspects of International Trade and Finance - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-28T09:01:49+00:00The Role of International Financial Integration in Monetary Policy Transmission
https://www.bankofcanada.ca/2024/02/staff-working-paper-2024-3/
We propose an open-economy New Keynesian model with financial integration that allows financial intermediaries to hold foreign long-term bonds. We study the implications of financial integration on monetary policy transmission. Among various aspects of financial integration, the bond duration plays a major role. These results hold for conventional and unconventional monetary policies.2024-02-06T14:47:16+00:00enThe Role of International Financial Integration in Monetary Policy Transmission2024-02-06Central bank researchInternational financial marketsMonetary policy transmissionStaff Working Paper 2024-3https://www.bankofcanada.ca/wp-content/uploads/2024/02/swp2024-3.pdfThe Role of International Financial Integration in Monetary Policy TransmissionJing Cynthia WuYinxi XieJi ZhangFebruary 2024EE4E44E5E52FF3F36F4F42International Portfolio Rebalancing and Fiscal Policy Spillovers
https://www.bankofcanada.ca/2023/11/staff-working-paper-2023-56/
We evaluate, both empirically and theoretically, the spillover effects that debt-financed fiscal policy interventions of the United States have on other economies. We consider a two-country model with international portfolio rebalancing effects. We show that US fiscal expansions would increase global long-term rates and hinder economic activity in the rest of the world.2023-11-01T15:05:01+00:00enInternational Portfolio Rebalancing and Fiscal Policy Spillovers2023-11-01Economic modelsFiscal policyInternational topicsStaff Working Paper 2023-56https://www.bankofcanada.ca/wp-content/uploads/2023/11/swp2023-56.pdfInternational Portfolio Rebalancing and Fiscal Policy SpilloversSami AlpandaUluc AysunSerdar KabacaNovember 2023EE3E32E6E62FF4F41F44International Economic Sanctions and Third-Country Effects
https://www.bankofcanada.ca/2023/08/staff-working-paper-2023-46/
We study the transmission and third-country effects of international sanctions. A sanctioned country’s losses are mitigated, and the sanctioning country’s losses amplified, if a third country does not join the sanctions, but the third country benefits from not joining.2023-08-23T14:39:57+00:00enInternational Economic Sanctions and Third-Country Effects2023-08-23Economic modelsExchange ratesInternational topicsStaff Working Paper 2023-46https://www.bankofcanada.ca/wp-content/uploads/2023/08/swp2023-46.pdfStaff Working Paper 2023-46Fabio GhironiDaisoon KimGalip Kemal OzhanAugust 2023FF3F31F4F41F42F5F51A Behavioral New Keynesian Model of a Small Open Economy Under Limited Foresight
https://www.bankofcanada.ca/2023/08/staff-working-paper-2023-44/
This paper studies exchange rate dynamics by incorporating bounded rationality, that is, limited foresight, in a small open-economy model. This behavior of limited foresight helps explain several observations and puzzles in the data of exchange rate movements.2023-08-17T08:56:50+00:00enA Behavioral New Keynesian Model of a Small Open Economy Under Limited Foresight2023-08-17Business fluctuations and cyclesExchange ratesInternational topicsMonetary policy transmissionStaff Working Paper 2023-44https://www.bankofcanada.ca/wp-content/uploads/2023/08/swp2023-44.pdfStaff Working Paper 2023-44Seunghoon NaYinxi XieAugust 2023EE4E43E7E70FF3F31F4F41The Macroeconomic Effects of Portfolio Equity Inflows
https://www.bankofcanada.ca/2023/06/staff-working-paper-2023-31/
I provide evidence that portfolio equity inflows can have expansionary effects on GDP and inflation if not offset by monetary policy. I use a shift-share instrument to estimate equity inflows based on plausibly exogenous timing of inflows into mutual funds with heterogeneous country portfolios.2023-06-09T09:26:14+00:00enThe Macroeconomic Effects of Portfolio Equity Inflows2023-06-09Business fluctuations and cyclesInternational financial marketsInternational topicsMonetary policyStaff Working Paper 2023-31https://www.bankofcanada.ca/wp-content/uploads/2023/06/swp2023-31.pdfThe Macroeconomic Effects of Portfolio Equity InflowsNick SanderJune 2023EE3E32FF3F32F4F44The 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 2023EE2E21E22E4E43E5E50E52E58FF4F41Stress Relief? Funding Structures and Resilience to the Covid Shock
https://www.bankofcanada.ca/2023/01/staff-working-paper-2023-7/
Funding structures affected the amount of financial stress different countries and sectors experienced during the spread of COVID-19 in early 2020. Policy responses targeting specific vulnerabilities were more effective at mitigating this stress than those supporting banks or the economy more broadly.2023-01-30T08:46:15+00:00enStress Relief? Funding Structures and Resilience to the Covid Shock2023-01-30Coronavirus disease (COVID-19)Exchange ratesFinancial institutionsFinancial stabilityFinancial system regulation and policiesInternational topicsStaff Working Paper 2023-7https://www.bankofcanada.ca/wp-content/uploads/2023/01/swp2023-7.pdfStress Relief? Funding Structures and Resilience to the Covid ShockKristin ForbesChristian FriedrichDennis ReinhardtJanuary 2023EE4E44E6E65FF3F31F36F4F42GG1G18G2G23G3G38Risk Amplification Macro Model (RAMM)
https://www.bankofcanada.ca/2023/01/technical-report-123/
The Risk Amplification Macro Model (RAMM) is a new nonlinear two-country dynamic model that captures rare but severe adverse shocks. The RAMM can be used to assess the financial stability implications of both domestic and foreign-originated risk scenarios.2023-01-26T10:06:18+00:00enRisk Amplification Macro Model (RAMM)2023-01-26Business fluctuations and cyclesEconometric and statistical methodsFinancial stabilityMonetary policy transmissionTechnical Report 123https://www.bankofcanada.ca/wp-content/uploads/2023/01/tr123.pdfRisk Amplification Macro Model (RAMM)Kerem TuzcuogluJanuary 2023CC5C51EE3E37E4E44FF4F44Stagflation 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 2022DD6D62EE5E52FF3F32F38F4F41Fiscal Policy in the Age of COVID-19: Does It “Get in All of the Cracks”?
https://www.bankofcanada.ca/2022/11/staff-working-paper-2022-45/
The COVID-19 pandemic has caused an atypical recession in which some sectors of the economy boomed and others collapsed. This required a unique fiscal policy reaction to both support firms and stimulate activity in sectors with slack. Was fiscal policy able to get where it was needed? Mostly, yes.2022-11-07T12:55:12+00:00enFiscal Policy in the Age of COVID-19: Does It “Get in All of the Cracks”?2022-11-07Coronavirus disease (COVID-19)Firm dynamicsFiscal policyInternational topicsStaff Working Paper 2022-45https://www.bankofcanada.ca/wp-content/uploads/2022/11/swp2022-45.pdfStaff Working Paper 2022-45Pierre-Olivier GourinchasŞebnem Kalemli-ÖzcanVeronika PenciakovaNicholas SanderNovember 2022DD5D57EE6E62FF4F41