Matthieu Verstraete is a senior economist in the Canadian Economic Analysis Department. Before joining the regional analysis team, he was a lecturer in economics at the University of Sherbrooke and, prior to that, worked at the Social Research and Demonstration Corporation. Matthieu contributes to the quarterly Business Outlook Survey, and conducts economic analysis and research. He is a co-author of two peer reviewed articles, one in Labour Economics and the other in the Economics of Education Review. He obtained his M. Sc. in Economics from the University of Quebec at Montreal (UQAM).
We conduct a randomized information experiment leveraging the Canadian Survey of Consumer Expectations. We provide causal evidence that respondents revise both their short and medium term expectations of future house price growth in a way that is consistent with observed short-term momentum in house prices. However, empirically, house price growth tends to revert to its mean in the medium term.
In this work, we use novel Canadian survey data to study how expectations of future changes in house prices are influenced by personal experiences. We find that recently experienced changes in local house prices are routinely extrapolated into expectations of year-ahead changes in national house prices.
This paper shows (i) that business sentiment, as captured by survey data, matters for monetary policy decisions in Canada, and (ii) how business perspectives are affected by monetary policy shocks. Measures of business sentiment (soft data) are shown to have systematic explanatory power for monetary policy decisions over and above typical Taylor rule variables.
Inflation expectations are a key determinant of actual and future inflation and thus matter for the conduct of monetary policy. We study how firms form their inflation expectations using quarterly firm-level data from the Bank of Canada’s Business Outlook Survey, spanning the 2001 to 2015 period.
“Public Subsidies to Private Schools do Make a Difference for Achievement in Mathematics: Longitudinal Evidence from Canada” (with P. Lefebvre, P. Merrigan), Economics of Education Review, vol. 30 (1), p. 79-98.
“Dynamic Labour Supply Effects of Childcare Subsidies: Evidence from a Canadian Natural Experiment on Low-fee Universal Child Care” (with P. Lefebvre, P. Merrigan), Labour Economics, vol. 16 (5), p. 490-502.
“Firm Strategy, Competitiveness and Productivity: The Case for Canada” (with L. Rennison and F. Novin), Bank of Canada Review, Autumn.
“Understanding Monetary Policy and its Effects: Evidence from Canadian firms using the Business Outlook Survey” CESifo Working Paper No. 7221, August 2018 [Download] [Abstract]
“Understanding Firms' Inflation Expectations Using the Bank of Canada's Business Outlook Survey” (with Simon Richards). September 2016. CESifo Working Paper No. 6090. Bank of Canada Staff Working Paper No. 2016-7.