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2333
result(s)
Estimating Large-Dimensional Connectedness Tables: The Great Moderation Through the Lens of Sectoral Spillovers
Staff Working Paper 2021-37
Felix Brunner,
Ruben Hipp
Understanding the size of sectoral links is crucial to predicting the impact of a crisis on the whole economy. We show that statistical learning techniques substantially outperform traditional estimation techniques when measuring large networks of these links.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Econometric and statistical methods
JEL Code(s):
C,
C2,
C22,
C5,
C52,
E,
E2,
E23,
E27
Cash and COVID-19: The impact of the second wave in Canada
Staff Discussion Paper 2021-12
Heng Chen,
Walter Engert,
Marie-Hélène Felt,
Kim Huynh,
Gradon Nicholls,
Daneal O’Habib,
Julia Zhu
The COVID-19 pandemic significantly increased the demand for cash. Cash in circulation increased sharply from March through December 2020, particularly in the early months of this period. Although use of electronic methods of payment also increased significantly, cash use for payments remains high for low-value transactions and among certain demographic groups.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Bank notes,
Central bank research,
Coronavirus disease (COVID-19),
Digital currencies and fintech,
Econometric and statistical methods
JEL Code(s):
C,
C1,
C12,
C9,
E,
E4,
O,
O5,
O54
Tariffs and the Exchange Rate: Evidence from Twitter
Staff Working Paper 2021-36
Dmitry Matveev,
Francisco Ruge-Murcia
Do tariffs affect exchange rates? We look at President Trump’s tweets during talks on the North American Free Trade Agreement and find that anticipation of higher tariffs on imports from Canada and Mexico led to an appreciation of the US dollar relative to Canadian and Mexican currency.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Trade integration
JEL Code(s):
F,
F1,
F13,
F3,
F31
The Positive Case for a CBDC
Staff Discussion Paper 2021-11
Andrew Usher,
Edona Reshidi,
Francisco Rivadeneyra,
Scott Hendry
We discuss the competition and innovation arguments for issuing a central bank digital currency (CBDC). A CBDC could be an effective competition policy tool for payments. A CBDC could also support the vibrancy of the digital economy. It could help solve market failures and foster competition and innovation in new digital payments markets.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Digital currencies and fintech,
Financial institutions,
Financial stability
JEL Code(s):
E,
E4,
E42,
E5,
E58,
L,
L4,
L5
Exploring the potential benefits of inflation overshooting
Staff Analytical Note 2021-16
Robert Amano,
Marc-André Gosselin,
Kurt See
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.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Inflation targets,
Labour markets,
Monetary policy,
Monetary policy framework
JEL Code(s):
E,
E3,
E31,
E5,
E52,
J,
J2,
J20
Stressed but not Helpless: Strategic Behaviour of Banks Under Adverse Market Conditions
Staff Working Paper 2021-35
Grzegorz Halaj,
Sofia Priazhkina
Our stress-testing tool considers banks under stress that can strategically manage their balance sheets. Using confidential Canadian supervisory data, we assess whether bank behaviour to maximize shareholder value can amplify a hypothetical stress scenario.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Economic models,
Financial institutions,
Financial stability,
Financial system regulation and policies
JEL Code(s):
C,
C6,
C63,
C7,
C72,
G,
G2,
G21
Sequencing Extended Monetary Policies at the Effective Lower Bound
Staff Discussion Paper 2021-10
Yang Zhang,
Lena Suchanek,
Jonathan Swarbrick,
Joel Wagner,
Tudor Schlanger
In this analysis, we use simulations in the Bank of Canada’s projection model—the Terms-of-Trade Economic Model—to consider a suite of extended monetary policies to support the economy following the COVID-19 crisis.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Coronavirus disease (COVID-19),
Monetary policy,
Monetary policy transmission
JEL Code(s):
E,
E3,
E4,
E5,
E52,
E58
The Side Effects of Safe Asset Creation
Staff Working Paper 2021-34
Sushant Acharya,
Keshav Dogra
The secular decline in real interest rates has created a challenge for monetary policy, now confronting the zero lower bound more often. An increase in the supply of safe assets reduces downward pressure on the natural interest rate. This allows monetary policy to reach price stability and full employment, but not without cost—permanently lower investment.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Fiscal policy,
Monetary policy implementation
JEL Code(s):
E,
E3,
E4,
E5,
G,
G1,
H,
H6
The Anatomy of Sentiment-Driven Fluctuations
Staff Working Paper 2021-33
Sushant Acharya,
Jess Benhabib,
Zhen Huo
We show that changes in sentiment that aren’t related to fundamentals can drive persistent macroeconomic fluctuations even when all economic agents are rational. Changes in sentiment can also affect how fundamental shocks affect macroeconomic outcomes.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models
JEL Code(s):
E,
E2,
E20,
E3,
E32,
F,
F4,
F44