We introduce a novel approach to categorize mortgaged homebuyers into first-time homebuyers, repeat homebuyers and investors. We show how these groups contribute to activity in Canadian housing markets, and we analyze the differences in their demographic and financial characteristics.
We assess the response of Government of Canada bond yields to the Bank of Canada’s initial announcement of the Government Bond Purchase Program (GBPP) as well as to the Bank’s later GBPP purchase operations.
Can the characteristics of new mortgages predict borrowers’ financial stress? Insights from the 2014 oil price declineWe study the relationship between characteristics of new mortgages and borrowers’ financial stress in Canada’s energy-intensive regions following the 2014 collapse in oil prices. We find that borrowers with limited home equity were more likely to have difficulty repaying debt.
We explain how housing supply elasticities for Canadian cities are estimated. The procedure we use exploits the systematic differences in various cities’ sensitivity to regional house-price cycles.
“Reach for yield”—This is the commonly heard explanation for why pension plans shift their portfolios toward alternative assets. But we show that the new portfolios also hold more bonds, offer lower average returns and produce smaller and less volatile solvency deficits. These shifts are part of a broader strategy to reduce solvency risk.
Natural disasters occur more often than before, potentially exposing households to financial distress. We study the intersection between household financial vulnerabilities and severe weather events.
Digital technologies have helped maintain economic activity while allowing people to remain physically distant throughout the COVID-19 crisis. This note shows that the number of online postings for jobs related to the production of digital technologies in Canada decreased less than the number for other jobs and recovered more quickly after lockdowns were lifted.
Using a structural model, we study the economic consequences of the COVID-19 shock. The uneven consequences, such as higher unemployment among young households, amplify the negative implications for the macroeconomy, household vulnerabilities and consumption inequality. Government support programs have stimulated the economy and lowered inequality and medium-term vulnerabilities.
After a period with the interest rate at the effective lower bound, temporarily overshooting inflation may offer important economic benefits. This may be especially true for vulnerable segments of the population, such as workers with low attachment to the labour force and the long-term unemployed.
The BoC–BoE database of sovereign debt defaults, published and updated annually by the Bank of Canada and the Bank of England, provides comprehensive estimates of stocks of government obligations in default.