Staff working papers provide a forum for staff to publish work-in-progress research intended for journal publication.
1290
result(s)
Are Working Hours Complements in Production?
Staff Working Paper 2022-47
Lin Shao,
Faisal Sohail,
Emircan Yurdagul
Using Canadian matched employer-employee data, we show that working hours of different workers are gross complements in production rather than perfect substitutes, as is typically assumed by macroeconomic models of production.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Labour markets
JEL Code(s):
E,
E2,
E23,
J,
J2,
J22,
J23,
J3,
J31
Stagflation and Topsy-Turvy Capital Flows
Staff Working Paper 2022-46
Julien Bengui,
Louphou Coulibaly
Unregulated capital flows are likely excessive during a stagflation episode, owing to a macroeconomic externality operating through the economy’s supply side. Inflows raise domestic wages and cause unwelcome upward pressure on firm costs, yet market forces likely generate such inflows. Optimal capital flow management instead requires net outflows.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
International financial markets,
International topics,
Monetary policy
JEL Code(s):
D,
D6,
D62,
E,
E5,
E52,
F,
F3,
F32,
F38,
F4,
F41
Fiscal Policy in the Age of COVID-19: Does It “Get in All of the Cracks”?
Staff Working Paper 2022-45
Pierre-Olivier Gourinchas,
Şebnem Kalemli-Özcan,
Veronika Penciakova,
Nicholas Sander
The COVID-19 pandemic has caused an atypical recession in which some sectors of the economy boomed and others collapsed. This required a unique fiscal policy reaction to both support firms and stimulate activity in sectors with slack. Was fiscal policy able to get where it was needed? Mostly, yes.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Coronavirus disease (COVID-19),
Firm dynamics,
Fiscal policy,
International topics
JEL Code(s):
D,
D5,
D57,
E,
E6,
E62,
F,
F4,
F41
Private Digital Cryptoassets as Investment? Bitcoin Ownership and Use in Canada, 2016-2021
Staff Working Paper 2022-44
Daniela Balutel,
Walter Engert,
Christopher Henry,
Kim Huynh,
Marcel Voia
We report on the dynamics of Bitcoin awareness and ownership from 2016 to 2021, using the Bank of Canada's Bitcoin Omnibus Surveys (BTCOS). Our analysis also helps understand Bitcoin owners who adopted during the COVID-19 and how they differ from long-term owners.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Bank notes,
Digital currencies and fintech,
Econometric and statistical methods
JEL Code(s):
C,
C1,
C12,
E,
E4,
O,
O5,
O51
Grasping De(centralized) Fi(nance) Through the Lens of Economic Theory
Staff Working Paper 2022-43
Jonathan Chiu,
Charles M. Kahn,
Thorsten Koeppl
We analyze the value proposition and limitations of decentralized finance (DeFi). Based on a distributed ledger and smart contracts, DeFi can guarantee the execution of financial contracts, potentially lowering the costs of intermediation and improving financial inclusion.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Digital currencies and fintech,
Payment clearing and settlement systems
JEL Code(s):
G,
G2
Behavioral Learning Equilibria in New Keynesian Models
Staff Working Paper 2022-42
Cars Hommes,
Kostas Mavromatis,
Tolga Özden,
Mei Zhu
We introduce behavioral learning equilibria (BLE) into DSGE models with boundedly rational agents using simple but optimal first order autoregressive forecasting rules. The Smets-Wouters DSGE model with BLE is estimated and fits well with inflation survey expectations. As a policy application, we show that learning requires a lower degree of interest rate smoothing.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models,
Inflation and prices,
Monetary policy
JEL Code(s):
C,
C1,
C11,
D,
D8,
D83,
D84,
E,
E3,
E6,
E62
The Central Bank’s Dilemma: Look Through Supply Shocks or Control Inflation Expectations?
Staff Working Paper 2022-41
Paul Beaudry,
Thomas J. Carter,
Amartya Lahiri
When countries are hit by supply shocks, central banks often face the dilemma of either looking through such shocks or reacting to them to ensure that inflation expectations remain anchored. In this paper, we propose a tractable framework to capture this dilemma and then explore optimal policy under a range of assumptions about how expectations are formed.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Economic models,
Inflation and prices,
Monetary policy,
Monetary policy and uncertainty,
Monetary policy communications
JEL Code(s):
E,
E1,
E12,
E2,
E24,
E3,
E31,
E5,
E52,
E58,
E6,
E65
Windfall Income Shocks with Finite Planning Horizons
Staff Working Paper 2022-40
Michael Boutros
How do households respond when they receive unanticipated income, such as an inheritance or government stimulus cheque? This paper studies these windfall income shocks through a model of household behaviour that generates a realistic consumption response for households along the entire distribution of wealth.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Domestic demand and components,
Economic models,
Fiscal policy
JEL Code(s):
D,
D9,
D91,
E,
E2,
E21,
G,
G5,
G51
House Price Responses to Monetary Policy Surprises: Evidence from the U.S. Listings Data
Staff Working Paper 2022-39
Denis Gorea,
Oleksiy Kryvtsov,
Marianna Kudlyak
Existing literature documents that house prices respond to monetary policy surprises with a significant delay, taking years to reach their peak response. We present new evidence of a much faster response.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Housing,
Inflation and prices,
Interest rates,
Monetary policy transmission
JEL Code(s):
E,
E5,
E52,
R,
R2,
R21,
R3,
R31