Perceived Unemployment Risks over Business Cycles Staff Working Paper 2025-23 William Du, Adrian Monninger, Xincheng Qiu, Tao Wang Aggregate consumption impacts of heightened job risks during recessions can arise either from ex-ante responses to the fear of unemployment or from ex-post consumption declines due to realized income losses. We use survey-based perceptions of job risk and actual labor market transitions to quantify the relative contributions of these two channels. We further show that belief stickiness limits the extent of ex-ante insurance against job risks. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Labour markets, Monetary policy and uncertainty JEL Code(s): D, D1, D14, E, E2, E21, E7, E71, G, G5, G51
Dynamic Consumer Cash Inventory Model Staff Working Paper 2025-22 Kim Huynh, Oleksandr Shcherbakov, André Stenzel We study consumer cash inventory behavior by developing a dynamic model of forward-looking consumers and estimating structural parameters of the model using detailed consumer survey data. Consumers facing holding and withdrawal costs solve a discrete-time continuous-control dynamic programming problem to optimally use cash at the point of sale. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): D, D1, D12, D14, E, E4, E41, E42, G, G2, G21
Monetary Policy Transmission with Endogenous Central Bank Responses in TANK Staff Working Paper 2025-21 Lilia Maliar, Chris Naubert We study how the transmission of monetary policy innovations is affected by the endogenous response of the central bank to macroeconomic aggregates in a two-agent New Keynesian model. We focus on how the stance of monetary policy and the fraction of savers in the economy affect transmission. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Interest rates, Monetary policy, Monetary policy transmission JEL Code(s): C, C6, C61, C62, C63, E, E3, E31, E5, E52
2024 Methods-of-Payment Survey Report: Cash in an Era of Alternatives Staff Discussion Paper 2025-12 Marie-Hélène Felt, Anna Chernesky, Angelika Welte We present core findings from the 2024 Methods-of-Payment Survey, highlighting results from both the survey questionnaire and three-day shopping diary. Although cash holdings have increased in nominal terms, we find that cash usage remains unchanged since 2020. Mobile and other alternative payment methods continue to grow in importance. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): D, D8, D83, E, E4, E41
Firm Heterogeneity and Adverse Selection in External Finance: Micro Evidence and Macro Implications Staff Working Paper 2025-20 Xing Guo, Pablo Ottonello, Thomas Winberry, Toni Whited We develop a heterogeneous firm macro model with private information and quantify the aggregate relevance of asymmetric information. We find that a spike in private information account for 40% of the decline in aggregate investment during the 2007-2009 financial crisis and made monetary stimulus significantly less effective. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Financial markets, Firm dynamics, Monetary policy JEL Code(s): D, D8, D82, E, E2, E22, E3, E32, E5, E52, G, G3, G30
On-the-run Premia, Settlement Fails, and Central Bank Access Staff Working Paper 2025-19 Fabienne Schneider The premium on “on-the-run” Treasuries is an anomaly. I explain it using a model in which primary dealers hold inventories of Treasuries. I use the model to analyze the effects of granting access to central bank facilities. Content Type(s): Staff research, Staff working papers Research Topic(s): Asset pricing, Financial markets, Market structure and pricing, Monetary policy JEL Code(s): G, G1, G12, G19, G2, G23
The Dynamic Canadian Debt Strategy Model Technical Report No. 127 Nicolas Audet, Joe Ning, Adam Epp, Jeffrey Gao We present a dynamic debt strategy model framework designed to assist sovereign debt portfolio managers in choosing an optimal debt issuance strategy. The main innovation of this framework is the introduction of dynamic issuance strategies, which allow issuance decisions to vary over time based on the model’s simulated state variables. Content Type(s): Staff research, Technical reports Research Topic(s): Debt management, Econometric and statistical methods, Financial markets, Fiscal policy JEL Code(s): C, C6, C61, G, G1, G11, G17, H, H6, H63, H68
Synthesizing Signals from the Canadian Survey of Consumer Expectations Staff Discussion Paper 2025-11 Jacob Dolinar, Patrick Sabourin, Matt West We introduce the Canadian Survey of Consumer Expectations indicator. This indicator provides a summary measure of consumer opinions that we can track over time. We construct three underlying sub-indexes—financial health, labour market and consumer spending—that capture different factors influencing consumers’ daily lives. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Central bank research JEL Code(s): D, D1, D12, D8, D84, E, E2, E21, E3, E32, E7, E71
How will mortgage payments change at renewal? An updated analysis Staff Analytical Note 2025-21 Claudia Godbout, Adam Su, Yang Xu We update an assessment of potential changes in payments that mortgage holders could face at renewal in 2025 and 2026. We use an enhanced dataset (RESL2) that provides a more accurate starting point for mortgage balances. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Credit and credit aggregates, Financial institutions, Financial stability, Housing, Interest rates, Recent economic and financial developments JEL Code(s): D, D1, D12, D14, G, G2, G21, G28, R, R2, R20
The impact of trading flows on Government of Canada bond prices Staff Analytical Note 2025-20 Andreas Uthemann, Rishi Vala, Jun Yang Trading flows affect Government of Canada bond prices. Our estimates suggest a sale of 1% of the available supply of bonds typically lowers bond prices by 0.2%. From 2000 to 2025, demand from institutional investors, such as Canadian pension funds and foreign investors, explains 69% of quarterly price variation, with the remainder explained by changes in the supply of bonds. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Asset pricing, Debt management, Econometric and statistical methods, Financial institutions, Financial markets, Financial stability, Market structure and pricing, Sectoral balance sheet JEL Code(s): C, C0, C01, C3, C36, C5, C58, D, D5, D53, E, E6, E62, G, G1, G11, G12, G2, G23