Bio

Yinxi Xie is a Senior Economist in the Model Development Division of the Canadian Economic Analysis Department and in the Economic and Financial Research Department. His research interests lie in the fields of Monetary Economics, International Macroeconomics, Behavioral Macroeconomics, and International Finance. Yinxi receives his Ph.D. in Economics from Columbia University, USA.

Research Field(s): Business Cycles Financial Economics International Macroeconomics Macroeconomics Monetary and Fiscal Policy Monetary Economics

Staff working papers

A Behavioral New Keynesian Model of a Small Open Economy Under Limited Foresight

Staff Working Paper 2023-44 Seunghoon Na, Yinxi Xie
This paper studies exchange rate dynamics by incorporating bounded rationality, that is, limited foresight, in a small open-economy model. This behavior of limited foresight helps explain several observations and puzzles in the data of exchange rate movements.
Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Exchange rates, International topics, Monetary policy transmission JEL Code(s): E, E4, E43, E7, E70, F, F3, F31, F4, F41

Understanding Inflation Dynamics: The Role of Government Expenditures

Staff Working Paper 2023-30 Chang Liu, Yinxi Xie
We study the impact government expenditure has on inflation. We find that changes in government expenditure account for a substantial portion of inflation variations. We also find that inflation and inflation expectations respond negatively to fiscal spending shocks, reaffirming the supply-side channel through which inflation responds to fiscal expansions.
Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Fiscal policy, Inflation and prices JEL Code(s): E, E3, E6, E62, E63

(Un)Conventional Monetary and Fiscal Policy

Staff Working Paper 2023-6 Jing Cynthia Wu, Yinxi Xie
We build a tractable New Keynesian model to study and compare four types of monetary and fiscal policy: policy rate adjustments, quantitative easing, lump-sum fiscal transfers and government spending. We find that tax-financed fiscal policy is more stimulative than debt-financed policy, and optimal policy coordination needs at least two of these four policy instruments.
Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Monetary policy JEL Code(s): E, E4, E6, E61, E62, E63

On the Wedge Between the PPI and CPI Inflation Indicators

Staff Working Paper 2022-5 Shang-Jin Wei, Yinxi Xie
We find that the CPI and PPI inflation indexes co-moved strongly throughout the late 20th century, but their correlation has fallen substantially since the early 2000s. We offer a structural explanation for this divergence based on the growth of global supply chains since 2000. This finding offers a unique perspective for the future design of optimal monetary policy.
Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Inflation targets, International topics, Monetary policy JEL Code(s): E, E3, E31, E5, E52, E58, F, F1, F11, F12, F4, F41, F6, F62

Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight

Staff Working Paper 2021-51 Michael Woodford, Yinxi Xie
How do outcomes of monetary and fiscal stabilization policies at the zero lower bound change when decision makers have finite planning horizons in the economy? We explore the effects of limited foresight on policy tools and the interaction between monetary and fiscal policy.
Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Central bank research, Fiscal policy, Monetary policy JEL Code(s): E, E5, E52, E6, E63, E7

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Journal publications

Refereed journals

  • "Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight"
    (with Michael Woodford), Journal of Monetary Economics, forthcoming 2021.
  • "Monetary Policy in an Era of Global Supply Chains"
    (with Shang-Jin Wei), Journal of International Economics, 124: 103299 (2020).
  • "Policy Options at the Zero Lower Bound When Foresight is Limited"
    (with Michael Woodford), AEA Papers and Proceedings, 109: 433-437 (2019).
  • "Machiavellian Experimentation"
    (with Xie Yang), Journal of Comparative Economics, 45(4): 685-711 (2017).