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64 Results

Allocative Efficiency and the Productivity Slowdown

Staff working paper 2021-1 Lin Shao, Rongsheng Tang
In our analysis of the US productivity slowdown in the 1970s and 2000s, we find that a significant portion of this deceleration can be attributed to a lack of improvement in allocative efficiency across sectors. Our analysis further identifies increased sector-level volatility as a major contributor to this lack of improvement in allocative efficiency.

ToTEM III: The Bank of Canada’s Main DSGE Model for Projection and Policy Analysis

ToTEM III is the most recent generation of the Bank of Canada’s main dynamic stochastic general equilibrium model for projection and policy analysis. The model helps Bank staff tell clear and coherent stories about the Canadian economy’s current state and future evolution.

Exchange Rates, Retailers, and Importing: Theory and Firm-Level Evidence

Staff working paper 2019-34 Alex Chernoff, Patrick Alexander
We develop a model with firm heterogeneity in importing and cross-border shopping among consumers. Exchange-rate appreciations lower the cost of imported goods, but also lead to more cross-border shopping; hence, the net impact on aggregate retail prices and sales is ambiguous.

Understanding the Systemic Implications of Climate Transition Risk: Applying a Framework Using Canadian Financial System Data

Our study aims to gain insight on financial stability and climate transition risk. We develop a methodological framework that captures the direct effects of a stressful climate transition shock as well as the indirect—or systemic—implications of these direct effects. We apply this framework using data from the Canadian financial system.

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.

Interconnected Banks and Systemically Important Exposures

How do banks' interconnections in the euro area contribute to the vulnerability of the banking system? We study both the direct interconnections (banks lend to each other) and the indirect interconnections (banks are exposed to similar sectors of the economy). These complex linkages make the banking system more vulnerable to contagion risks.
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