Posts
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Estimating the Fractional Order of Integration of Interest Rates Using a Wavelet OLS Estimator
The debate on the order of integration of interest rates has long focused on the I(1) versus I(0) distinction. In this paper, we use instead the wavelet OLS estimator of Jensen (1999) to estimate the fractional integration parameters of several interest rates for the United States and Canada from 1948 to 1999. -
The Effects of Inflation Targeting for Financial Development
The adoption of inflation targeting (IT) by central banks leads to an increase of 10 to 20 percent in measures of financial development, with a lag. We also find evidence that the financial sector benefits of IT adoption were higher for early-adopting central banks. -
January 11, 2016
Business Outlook Survey - Winter 2015-16
Overall, responses to the winter Business Outlook Survey indicate that business sentiment has deteriorated as the negative effects of the commodity price shock continue to unfold and spread beyond the resource sector. However, exporters not directly affected by lower commodity prices continue to benefit from strong U.S. demand and the weak Canadian dollar. -
Relationships in the Interbank Market
In the interbank market, banks will sometimes trade below the central bank's deposit rate. We explain this anomaly using a theory based on market frictions and relationship lending. -
Building New Plants or Entering by Acquisition? Estimation of an Entry Model for the U.S. Cement Industry
In many industries, firms usually have two choices when expanding into new markets: They can either build a new plant (greenfield entry) or they can acquire an existing incumbent. In the U.S. cement industry, the comparative advantage (e.g., TFP or size) of entrants versus incumbents and regulatory entry barriers are important factors that determine the means of expansion. -
January 27, 2005
Monetary Policy Report Update – January 2005
The adjustment of the Canadian economy to major global developments continues to shape the economic outlook. -
February 11, 2013
Financial Stability in One Country?
Deputy Governor Tim Lane discusses the cross-border implications of financial instability and financial reform. -
December 10, 2014
Exchange-Traded Funds: Evolution of Benefits, Vulnerabilities and Risks
Ian Foucher and Kyle Gray explain the different types of exchange-traded funds (ETFs), which present both benefits and risks for investors. They discuss ways in which the risk characteristics of certain ETF products could have broader implications for the financial system, and describe the evolution of ETF market structure and regulation in different jurisdictions as authorities try to mitigate risks related to ETFs. -
Resolving Failed Banks: Uncertainty, Multiple Bidding & Auction Design
Bank resolution is costly. In the United States, the Federal Deposit Insurance Corporation (FDIC) typically resolves failing banks by auction.