Yaz Terajima is the Director of the Financial Studies Division in the Financial Stability Department. His primary research interests include macroeconomic implications of household and firm finances, banking and monetary policy. Specific topics include distributive effects of inflation across households, wealth accumulation based on occupational and educational choices, small business bankruptcy and bank leverage dynamics. He holds a Ph.D. from the University of Pennsylvania.
We document that, across households, the money consumption ratio increases with age and decreases with consumption, and that there has been a large increase in the money consumption ratio during the recent era of very low interest rates. We construct an overlapping generations (OLG) model of money holdings for transaction purposes subject to age (older households use more money), cohort (younger generations are exposed to better transaction technology), and time effects (nominal interest rates affect money holdings).
In light of the financial crisis and its aftermath, several economists have argued that inflation-targeting central banks should reconsider the level of their inflation targets. While the appropriate level for the inflation target remains an open question, it’s important to note that any transition to a new target would entail certain costs.
This paper analyzes the implications of the global financial cycle for conventional and unconventional monetary policies and macroprudential policy in small, open economies such as Canada. The paper starts by summarizing recent work on financial cycles and their growing correlation across borders.
This paper studies how banks simultaneously manage the two sides of their balance sheet and its implications for bank risk taking and real economic activity. First, we analyze how changes in funding affect the supply of bank loans.
The authors document leverage, capital and liquidity ratios of banks in Canada. These ratios are important indicators of different types of risk with respect to a bank’s balance‐sheet management. Particular attention is given to the observations by different types of banks, including small banks that historically received less attention.
"Leverage, Balance-Sheet Size and Wholesale Funding," (with Evren Damar and Césaire Meh), Journal of Financial Intermediation, 22(4), 639-662 (2013).
"Inflation, Nominal Portfolios, and Wealth Redistribution in Canada," (with Césaire A. Meh), Canadian Journal of Economics 44(4), 1369-1402 (2011).
"Aggregate and Welfare Effects of Redistribution of Wealth Under Inflation and Price-Level Targeting," (with Césaire A. Meh and José-Víctor Ríos-Rull), Journal of Monetary Economics 57(6), 637-652 (2010).
"Uninsurable Investment Risks and Capital Income Taxation," (with Césaire A. Meh). Annals of Finance 5(3), 521-541 (2009).