Mariel Yacolca Maguiña

Using Canadian firm-level market shares and an oligopolistic model, the paper shows that a 25% counter-tariff on U.S. imports raises Canada's aggregate price index by 0.66%, far below direct cost pass-through predictions due to consumer substitution and markup adjustments.

We develop a framework to quantify how tariff changes on imported goods affect sectoral and aggregate consumption prices through direct and production-network channels. Using Canada's input-output matrix and administrative firm-good import data for the universe of Canadian firms, we estimate price elasticities for tariffs on U.S.-imported goods.

Global currency risk factors continue to explain a large share of the variation in the Canadian dollar during the period following the 2008–09 global financial crisis. We show that they are also systematically important for risk premiums, and only in recent months has the role of idiosyncratic country-specific risks grown.