Variations in Pass-Through from Global Agricultural Commodity Prices to Domestic Food Inflation Staff discussion paper 2023-24 Daniel Hyun, Jacky Lee This paper examines factors that affect the transmission of fluctuations in global agricultural commodity prices to domestic food inflation. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E3, E31, Q, Q0, Q02, Q1, Q11, Q17, Q18 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Structural challenges, International trade, finance and competitiveness
A Blueprint for the Fourth Generation of Bank of Canada Projection and Policy Analysis Models Staff discussion paper 2023-23 Donald Coletti The fourth generation of Bank of Canada projection and policy analysis models seeks to improve our understanding of inflation dynamics, the supply side of the economy and the underlying risks faced by policy-makers coming from uncertainty about how the economy functions. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C5, C50, C51, C52, C53, C54, C55 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Real economy and forecasting
Three things we learned about the Lynx payment system Staff analytical note 2023-14 Nikil Chande, Zhentong Lu, Hiru Rodrigo, Phoebe Tian Canada transitioned to a new wholesale payment system, Lynx, in August 2021. Lynx is based on a real-time settlement model that eliminates credit risk in the system. This model can require more liquidity; however, Lynx’s design allows Canada’s wholesale payments to settle efficiently. Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C1, C10, E, E4, E42, G, G2, G28 Research Theme(s): Money and payments, Payment and financial market infrastructures
Labor Market Shocks and Monetary Policy Staff working paper 2023-52 Serdar Birinci, Fatih Karahan, Yusuf Mercan, Kurt See We develop a heterogeneous-agent New Keynesian model featuring a frictional labor market with on-the-job search to quantitatively study the positive and normative implications of employer-to-employer transitions for inflation. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E12, E2, E24, E5, E52, J, J3, J31, J6, J62, J64 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Real economy and forecasting
Intermediary Market Power and Capital Constraints Staff working paper 2023-51 Jason Allen, Milena Wittwer We examine how intermediary capitalization affects asset prices in a framework that allows for intermediary market power. We introduce a model in which capital-constrained intermediaries buy or trade an asset in an imperfectly competitive market, and we show that weaker capital constraints lead to both higher prices and intermediary markups. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D4, D40, D44, G, G1, G12, G18, G2, G20, L, L1, L10 Research Theme(s): Financial markets and funds management, Funds management, Market functioning, Market structure, Financial system, Financial institutions and intermediation
Redefining Financial Inclusion for a Digital Age: Implications for a Central Bank Digital Currency Staff discussion paper 2023-22 Alexandra Sutton-Lalani, Sebastian Hernandez, John Miedema, Jiamin Dai, Badr Omrane We explore quantitative and qualitative information about Canadians who face barriers to making digital payments. We also consider the implications of ongoing digitalization for modern financial inclusion and a potential central bank digital currency. Content Type(s): Staff research, Staff discussion papers JEL Code(s): A, A1, A14, E, E4, E42, E5, E50, I, I3, I31, O, O3, O33, O5, O51 Research Theme(s): Money and payments, Digital assets and fintech, Retail payments, Structural challenges, Demographics and labour supply, Digitalization and productivity