Recent Evidence on the Resiliency of Flexible Inflation Targeting
This paper assesses the resilience of flexible inflation targeting in the presence of large and persistent supply shocks.
Browse Bank of Canada research by keyword, author, content type, JEL code, theme or date of publication.
Content older than 10 years is available on the Bank’s Open Access Repository.
Receive notification by email whenever new research is added to the website.
5
result(s)
The Macroeconomic Effects of Debt Relief Policies During Recessions
Staff working paper 2023-48
Soyoung Lee
A large-scale reduction in mortgage principal can strengthen a recovery, support house prices and lower foreclosures. The nature of the intervention shapes its impact, which rests on how resources are redistributed across households. The availability of bankruptcy on unsecured debt changes the response to large-scale mortgage relief by reducing precautionary savings.
Content Type(s):
Staff research,
Staff working papers
JEL Code(s):
E,
E2,
E21,
E3,
E32,
E6
Research Theme(s):
Financial system,
Household and business credit,
Models and tools,
Economic models,
Monetary policy,
Monetary policy tools and implementation,
Real economy and forecasting
Persistent Debt and Business Cycles in an Economy with Production Heterogeneity
Staff working paper 2023-17
Aubhik Khan,
Soyoung Lee
We examine the role of debt in amplifying and propagating recessions. Firms’ debt adjustment makes recessions deeper but makes expansions gradual. In particular, when the aggregate business leverage is ten percentage points above average, the half-life of the recovery doubles.
Content Type(s):
Staff research,
Staff working papers
JEL Code(s):
E,
E2,
E23,
E3,
E30,
E32
Research Theme(s):
Financial system,
Financial stability and systemic risk,
Household and business credit,
Monetary policy,
Real economy and forecasting
Heterogeneity and Monetary Policy: A Thematic Review
Staff discussion paper 2022-2
Felipe Alves,
Christian Bustamante,
Xing Guo,
Katya Kartashova,
Soyoung Lee,
Thomas Michael Pugh,
Kurt See,
Yaz Terajima,
Alexander Ueberfeldt
The theory that rich economic diversity of businesses and households both affects and is shaped by economy-wide fluctuations has strong implications for monetary policy. This review places these insights in a Canadian context.
Content Type(s):
Staff research,
Staff discussion papers
JEL Code(s):
D,
D2,
D25,
D3,
D31,
E,
E2,
E22,
E24,
E5,
E50,
E52
Research Theme(s):
Financial system,
Household and business credit,
Models and tools,
Economic models,
Monetary policy,
Monetary policy framework and transmission
A Generalized Endogenous Grid Method for Default Risk Models
Staff working paper 2021-11
Youngsoo Jang,
Soyoung Lee
Models with default options are hard to solve. We propose an extension of the endogenous grid method that solves default risk models more efficiently and accurately.
Content Type(s):
Staff research,
Staff working papers
JEL Code(s):
C,
C6,
C63,
E,
E3,
E37
Research Theme(s):
Models and tools,
Econometric, statistical and computational methods,
Economic models