Benchmarks for assessing labour market health: 2024 update
We assess the health of the Canadian labour market. We find that it has seen gradual but material easing since 2023, amid some signs of structural changes.
Staff analytical notes are short articles that focus on topical issues relevant to the current economic and financial context.
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result(s)
Liquidity risks at Canadian life insurance companies
Staff Analytical Note 2024-7
Patrick Aldridge,
Stephane Gignac,
Rishi Vala,
Adrian Walton
We examine how life insurers manage liquidity risks created by their business model. We find that Canadian life insurers did not face significant liquidity draws and continued their usual investment behaviour during the COVID-19 crisis and as interest rates increased in 2022.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Coronavirus disease (COVID-19),
Financial institutions,
Financial markets,
Financial stability,
Market structure and pricing
JEL Code(s):
D,
D4,
D47,
D5,
D53,
G,
G1,
G12,
G14,
G2,
G23
Pricing behaviour and inflation during the COVID-19 pandemic: Insights from consumer prices microdata
Staff Analytical Note 2024-6
Olga Bilyk,
Mikael Khan,
Olena Kostyshyna
Using the microdata underlying the Canadian consumer price index, we study how often and by how much firms changed their prices during the COVID-19 pandemic. We find that the surge in inflation was mainly associated with retailers raising prices much more often than before. We also find that more recently, corporate price-setting behaviour appears to be approaching pre-pandemic norms.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Firm dynamics,
Inflation and prices,
Recent economic and financial developments
JEL Code(s):
D,
D2,
D22,
E,
E3,
E31,
L,
L1,
L11
Measuring household financial stress in Canada using consumer surveys
Staff Analytical Note 2024-5
Nicolas Bédard,
Patrick Sabourin
We use data from the Canadian Survey of Consumer Expectations to understand how households are coping with high inflation and high interest rates. We build a subjective measure of financial stress and find that the level of stress is at a historical high but remains manageable for most households.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Domestic demand and components,
Financial stability,
Monetary policy transmission,
Recent economic and financial developments
JEL Code(s):
D,
D1,
D14,
G,
G5,
H,
H3
What has been putting upward pressure on CORRA?
Staff Analytical Note 2024-4
Boran Plong,
Neil Maru
From the autumn of 2023 into early 2024, the Canadian Overnight Repo Rate Average (CORRA), a measure of the cost of overnight general collateral Canadian dollar repos, was consistently well above the Bank’s target for the overnight rate. We find that, among several factors, long bond positions that require repo financing are the main driver of the recent upward pressure on CORRA.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Financial markets,
Interest rates,
Lender of last resort,
Monetary policy implementation
JEL Code(s):
D,
D4,
D5,
D53,
E,
E4,
E43,
E44,
E5,
E52,
G,
G1,
G12
How changes in the share of constrained households affect the effectiveness of monetary policy
Staff Analytical Note 2024-3
Felipe Alves,
Sushant Acharya
We measure how the change in the share of constrained households in Canada following the COVID-19 recession has impacted the effectiveness of monetary policy.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Coronavirus disease (COVID-19),
Monetary policy transmission
JEL Code(s):
E,
E2,
E21,
E4,
E40,
E5,
E50
Market structure of cryptoasset exchanges: Introduction, challenges and emerging trends
Staff Analytical Note 2024-2
Vladimir Skavysh,
Jacob Sharples,
Sofia Priazhkina,
Salman H. Hasham
This paper provides an overview of cryptoasset exchanges. We contrast their design with exchanges in traditional financial markets and discuss emerging regulatory trends and innovations aimed at solving the problems cryptoasset exchanges face.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Digital currencies and fintech,
Payment clearing and settlement systems
JEL Code(s):
G,
G1,
G15,
L,
L1
Modelling Canadian mortgage debt and payments in a semi-structural model
Staff Analytical Note 2024-1
Fares Bounajm,
Austin McWhirter
We show how Canadian mortgage debt dynamics can be modelled in a semi-structural macroeconomic model, such as the Bank of Canada’s LENS. The model we propose accounts for Canada’s unique mortgage debt structure.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Economic models,
Monetary policy transmission
JEL Code(s):
E,
E2,
E27,
E4,
E43,
E47,
G,
G5,
G51
The impact of higher interest rates on mortgage payments
Staff Analytical Note 2023-19
Maria teNyenhuis,
Adam Su
We investigate how the increase in interest rates since early 2022 is affecting mortgage payments. By November 2023, less than half of mortgage holders had faced higher payments. Many borrowers will see a sizable increase in payments at renewal, although income growth could help mitigate the impact.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Credit and credit aggregates,
Financial institutions,
Interest rates,
Recent economic and financial developments
JEL Code(s):
D,
D1,
E,
E4,
E5,
G,
G2,
G21
Finding the balance—measuring risks to inflation and to GDP growth
Staff Analytical Note 2023-18
Bruno Feunou,
James Kyeong
Using our new quantitative tool, we show how the risks to the inflation and growth outlooks have evolved over the course of 2023.
Content Type(s):
Staff research,
Staff analytical notes
Research Topic(s):
Business fluctuations and cycles,
Econometric and statistical methods
JEL Code(s):
C,
C3,
C32,
C5,
C58,
E,
E4,
E44,
G,
G1,
G17