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77 Results

Markov‐Switching Three‐Pass Regression Filter

We introduce a new approach for the estimation of high-dimensional factor models with regime-switching factor loadings by extending the linear three-pass regression filter to settings where parameters can vary according to Markov processes.

Exploring Wage Phillips Curves in Advanced Economies

Staff discussion paper 2019-8 Rose Cunningham, Vikram Rai, Kristina Hess
We investigate the extent to which excess supply (demand) in labour markets contributes to a lower (higher) growth rate of average nominal wages for workers. Using panel methods on data from 10 advanced economies for 1992–2018, we produce reduced-form estimates of a wage Phillips curve specification that is consistent with a New Keynesian framework.

The Real-Time Properties of the Bank of Canada’s Staff Output Gap Estimates

We study the revision properties of the Bank of Canada’s staff output gap estimates since the mid-1980s. Our results suggest that the average staff output gap revision has decreased significantly over the past 15 years, in line with recent evidence for the U.S.

A New Measure of Monetary Policy Shocks

Staff working paper 2021-29 Xu Zhang
Combining various high frequency financial data with central bank projections, I construct a new measure of monetary policy shocks not predictable by the public information preceding a central bank’s announcements. I then study the causal effects of monetary policy on the macro economy.

Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments

Can daycare replace parents’ time spent with children? We explore this by using data on how parents spend time and money on children and how this spending is related to their child’s development.

Rising US LNG Exports and Global Natural Gas Price Convergence

Staff discussion paper 2021-14 Robert Ialenti
We assess how rising exports of US liquefied natural gas affect the convergence of natural gas prices worldwide. Our results may have implications for the development of future LNG export capacity in Canada.

Settlement Balances Deconstructed

Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution.

Energy Efficiency and Fluctuations in CO2 Emissions

Staff working paper 2021-47 Soojin Jo, Lilia Karnizova
Carbon dioxide emissions have been commonly modelled as rising and falling with total output. Yet many factors, such as energy-efficiency improvements and shifts to cleaner energy, can break this relationship. We evaluate these factors using US data and find that changes in energy efficiency of consumption goods explain a significant proportion of emissions fluctuations. This finding also implies that models that omit energy efficiency likely overestimate the trade-off between environmental protection and economic performance.
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