Malik Shukayev

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Staff Discussion Papers

Implementing Cross-Border Interbank Lending in BoC-GEM-FIN

Staff Discussion Paper 2016-19 Malik Shukayev, Argyn Toktamyssov
BIS interbank lending data show that the Great Recession generated large and persistent changes in the international interbank lending positions of various countries. The main objective of this study is to understand the role of changes in international interbank credit flows in transmitting shocks across borders.

Staff Working Papers

Limited Commitment, Endogenous Credibility and the Challenges of Price-level Targeting

Staff Working Paper 2018-61 Gino Cateau, Malik Shukayev
This paper studies the cost of limited commitment when a central bank has the discretion to adjust policy whenever the costs of honoring its past commitments become high. Specifically, we consider a central bank that seeks to implement optimal policy in a New Keynesian model by committing to a price-level target path.

The Extensive Margin of Trade and Monetary Policy

Staff Working Paper 2018-37 Yuko Imura, Malik Shukayev
This paper studies the effects of monetary policy shocks on firms’ participation in exporting. We develop a two-country dynamic stochastic general equilibrium model in which heterogeneous firms make forward-looking decisions on whether to participate in the export market and prices are staggered across firms and time.

Monetary Policy Tradeoffs Between Financial Stability and Price Stability

Staff Working Paper 2016-49 Malik Shukayev, Alexander Ueberfeldt
We analyze the impact of interest rate policy on financial stability in an environment where banks can experience runs on their short-term liabilities, forcing them to sell assets at fire-sale prices.

Managing Risk Taking with Interest Rate Policy and Macroprudential Regulations

Staff Working Paper 2016-47 Simona Cociuba, Malik Shukayev, Alexander Ueberfeldt
We develop a model in which a financial intermediary’s investment in risky assets—risk taking—is excessive due to limited liability and deposit insurance and characterize the policy tools that implement efficient risk taking.

Do Low Interest Rates Sow the Seeds of Financial Crises?

Staff Working Paper 2011-31 Simona Cociuba, Malik Shukayev, Alexander Ueberfeldt
A view advanced in the aftermath of the late-2000s financial crisis is that lower than optimal interest rates lead to excessive risk taking by financial intermediaries.

Price-Level Targeting and Inflation Expectations: Experimental Evidence

Staff Working Paper 2011-18 Robert Amano, Jim Engle-Warnick, Malik Shukayev
In this paper, we use an economics decision-making experiment to test a key assumption underpinning the efficacy of price-level targeting relative to inflation targeting for business cycle stabilization and mitigating the effects of the zero lower bound on nominal interest rates.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Monetary policy framework JEL Code(s): E, E3, E32, E5, E52

Price Level Targeting: What Is the Right Price?

Staff Working Paper 2010-8 Malik Shukayev, Alexander Ueberfeldt
Various papers have suggested that Price-Level targeting is a welfare improving policy relative to Inflation targeting. From a practical standpoint, this raises an important yet unanswered question: What is the optimal price index to target?
Content Type(s): Staff Research, Staff Working Papers Topic(s): Monetary policy framework JEL Code(s): E, E3, E32, E5, E52

Risk Premium Shocks and the Zero Bound on Nominal Interest Rates

Staff Working Paper 2009-27 Robert Amano, Malik Shukayev
There appears to be a disconnect between the importance of the zero bound on nominal interest rates in the real-world and predictions from quantitative DSGE models. Recent economic events have reinforced the relevance of the zero bound for monetary policy whereas quantitative models suggest that the zero bound does not constrain (optimal) monetary policy.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Monetary policy framework JEL Code(s): E, E3, E32, E5, E52

Adopting Price-Level Targeting under Imperfect Credibility in ToTEM

Using the Bank of Canada's main projection and policy-analysis model, ToTEM, this paper measures the welfare gains of switching from inflation targeting to price-level targeting under imperfect credibility. Following the policy change, private agents assign a probability to the event that the policy-maker will revert to inflation-targeting next period.

Adopting Price-Level Targeting under Imperfect Credibility: An Update

Staff Working Paper 2008-37 Oleksiy Kryvtsov, Malik Shukayev, Alexander Ueberfeldt
This paper measures the welfare gains of switching from inflation-targeting to price-level targeting under imperfect credibility. Vestin (2006) shows that when the monetary authority cannot commit to future policy, price-level targeting yields higher welfare than inflation targeting.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Credibility, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52