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1077 result(s)

Why Fixed Costs Matter for Proof-of-Work Based Cryptocurrencies

Staff Working Paper 2020-27 Rod Garratt, Maarten van Oordt
Can Bitcoin survive? Some say it will become vulnerable to attacks as the rewards for processing Bitcoin transactions continue to decline. The economics of fixed costs suggest the specialized hardware used to mine Bitcoin may be key to its survival.

Monetary Policy Implementation and Payment System Modernization

Staff Working Paper 2020-26 Jonathan Witmer
Canada plans to adopt a retail payment system to allow Canadians to pay in real time (or near real time) 24 hours a day, 7 days a week. However, the traditional model for setting the overnight interest rate does not operate 24/7.

Monetary Policy Independence and the Strength of the Global Financial Cycle

Staff Working Paper 2020-25 Christian Friedrich, Pierre Guérin, Danilo Leiva-Leon
We propose a new strength measure of the global financial cycle by estimating a regime-switching factor model on cross-border equity flows for 61 countries. We then assess how the strength of the global financial cycle affects monetary policy independence, which is defined as the response of central banks' policy interest rates to exogenous changes in inflation.

An Economic Perspective on Payments Migration

Staff Working Paper 2020-24 Anneke Kosse, Zhentong Lu, Gabriel Xerri
Consumers, businesses and banks make millions of payments each day using a variety of instruments, such as debit cards, cheques and wires. Canada is currently developing three new systems to process these transactions: Lynx, Settlement Optimization Engine (SOE) and Real-Time Rail (RTR).

Trading for Bailouts

Staff Working Paper 2020-23 Toni Ahnert, Caio Machado, Ana Elisa Pereira
In times of high uncertainty, governments often implement interventions such as bailouts to financial institutions. To use public resources efficiently and to avoid major spillovers to the rest of the economy, policy-makers try to identify which institutions should receive assistance.

Dynamic Competition in Negotiated Price Markets

Staff Working Paper 2020-22 Jason Allen, Shaoteng Li
In many credit markets, prices are negotiated repeatedly. The final mortgage rate, for example, is rarely the posted price, but something that borrowers and lenders have bargained over. If borrowers are not satisfied with the rates their lenders propose, they need to search for and negotiate better offers.

Classical Decomposition of Markowitz Portfolio Selection

Staff Working Paper 2020-21 Christopher Demone, Olivia Di Matteo, Barbara Collignon
In this study, we enhance Markowitz portfolio selection with graph theory for the analysis of two portfolios composed of either EU or US assets. Using a threshold-based decomposition of their respective covariance matrices, we perturb the level of risk in each portfolio and build the corresponding sets of graphs.
Content Type(s): Staff research, Staff working papers Topic(s): Central bank research JEL Code(s): C, C0, C02

Trading on Long-term Information

Staff Working Paper 2020-20 Corey Garriott, Ryan Riordan
Investors who trade based on good research are said to be the backbone of stock markets: They conduct research to discover the value of stocks and, through their trading, guide financial prices to reflect true value. What can make their job difficult is that high-speed, short-term traders could use machine learning and other technologies to infer when informed investors are trading.