Real economy and forecasting

• Canadian housing supply elasticities

  Staff analytical note 2021-21 Nuno Paixão

  We explain how housing supply elasticities for Canadian cities are estimated. The procedure we use exploits the systematic differences in various cities’ sensitivity to regional house-price cycles.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): R, R1, R14, R3, R31, R5, R52 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting

• Payment Habits During COVID-19: Evidence from High-Frequency Transaction Data

  Staff working paper 2021-43 Tatjana Dahlhaus, Angelika Welte

  We examine how consumers have adjusted their payment habits during the COVID-19 pandemic. They seem to perform fewer transactions, spend more in each transaction, use less cash at the point of sale and withdraw cash from ATMs linked to their financial institution more often than from other ATMs.

  Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C22, C5, C55, D, D1, D12, E, E2, E21, E4, E42, E5, E52 Research Theme(s): Monetary policy, Real economy and forecasting, Money and payments, Payment and financial market infrastructures, Retail payments

• From He-Cession to She-Stimulus? The Labor Market Impact of Fiscal Policy Across Gender

  Staff working paper 2021-42 Alica Ida Bonk, Laure Simon

  The effects of fiscal policy shocks on labour market outcomes across gender depend on the type of public expenditure. Women benefit most from increases in the government wage bill, while men are the main beneficiaries of higher investment spending.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E6, E62, J, J1, J16, J2, J21 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply

• Fiscal Spillovers: The Case of US Corporate and Personal Income Taxes

  Staff working paper 2021-41 Madeline Hanson, Daniela Hauser, Romanos Priftis

  How do changes to personal and corporate income tax rates in the United States affect its trading partners? Spillover effects from cuts in the two taxes differ. They are generally small and negative for corporate taxes, but sizable and positive for personal income taxes.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E6, E62, F, F4, F44, H, H2, H20 Research Theme(s): Financial system, Financial stability and systemic risk, Monetary policy, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness

• Measuring the Effectiveness of Salespeople: Evidence from a Cold-Drink Market

  Staff working paper 2021-40 Haofeng Jin, Zhentong Lu

  Salespeople are widely employed in many industries. We leverage a unique data set on retail sales from a leading Chinese cold-drink manufacturer and information on the firm’s salespeople assignment rule to measure the causal effect of salespeople on product revenue.

  Content Type(s): Staff research, Staff working papers JEL Code(s): L, L8, L81, M, M3, M5 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply

• The uneven economic consequences of COVID 19: A structural analysis

  Staff analytical note 2021-17 Martin Kuncl, Austin McWhirter, Alexander Ueberfeldt

  Using a structural model, we study the economic consequences of the COVID-19 shock. The uneven consequences, such as higher unemployment among young households, amplify the negative implications for the macroeconomy, household vulnerabilities and consumption inequality. Government support programs have stimulated the economy and lowered inequality and medium-term vulnerabilities.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E2, E20, E5, E52, E6, E62 Research Theme(s): Financial system, Household and business credit, Monetary policy, Inflation dynamics and pressures, Monetary policy tools and implementation, Real economy and forecasting

• Monetary Policy and the Persistent Aggregate Effects of Wealth Redistribution

  Staff working paper 2021-38 Martin Kuncl, Alexander Ueberfeldt

  Monetary policy in the presence of nominal debt and labour supply heterogeneity creates a policy trade-off: a short-term economic stimulus leads to persistently reduced output over the medium term. Price-level targeting weakens this trade-off and is better able to stabilize inflation and output than inflation targeting.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E5, E50 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting

• 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 JEL Code(s): C, C2, C22, C5, C52, E, E2, E23, E27 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting

• 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 JEL Code(s): E, E3, E31, E5, E52, J, J2, J20 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Real economy and forecasting

• 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 JEL Code(s): E, E2, E20, E3, E32, F, F4, F44 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting