April 14, 2007 The Canadian Overnight Market: Recent Evolution and Structural Changes Bank of Canada Review - Spring 2007 Christopher Reid Since 1997 when the Bank of Canada last published a review of the Canadian overnight market, several important changes have affected the market's structure and dynamics. Reid provides a current overview of the market, examining the financial instruments, market transparency and flows, and the collateralized overnight rate as it has evolved since the introduction of the Large Value Transfer System and the fixed announcement dates. Other significant influences include changes in market practices regarding risk management, the rise of securities lending, the increased demand for collateral, and the Bank of Canada's measures to reinforce the target for the overnight rate. Content Type(s): Publications, Bank of Canada Review articles
Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight Staff working paper 2021-51 Michael Woodford, Yinxi Xie How do outcomes of monetary and fiscal stabilization policies at the zero lower bound change when decision makers have finite planning horizons in the economy? We explore the effects of limited foresight on policy tools and the interaction between monetary and fiscal policy. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E52, E6, E63, E7 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting
The Simple Economics of Global Fuel Consumption Staff working paper 2019-35 Doga Bilgin, Reinhard Ellwanger This paper presents a structural framework of the global oil market that relies on information on global fuel consumption to identify flow demand for oil. We show that under mild identifying assumptions, data on global fuel consumption help to provide comparatively sharp insights on elasticities and other key structural parameters of the global oil market. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C51, L, L7, L71, Q, Q4, Q41, Q43 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
October 31, 2017 Research Update - October 2017 This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website. Content Type(s): Staff research, Research newsletters
Reconciling Jaimovich-Rebelo Preferences, Habit in Consumption and Labor Supply Staff working paper 2018-26 Tom D. Holden, Paul Levine, Jonathan Swarbrick This note studies a form of a utility function of consumption with habit and leisure that (a) is compatible with long-run balanced growth, (b) hits a steady-state observed target for hours worked and (c) is consistent with micro-econometric evidence for the inter-temporal elasticity of substitution and the Frisch elasticity of labor supply. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E24 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Housing Price Network Effects from Public Transit Investment: Evidence from Vancouver Staff working paper 2018-18 Alex Chernoff, Andrea Craig In this paper, we estimate the effect on housing prices of the expansion of the Vancouver SkyTrain rapid transit network during the period 2001–11. We extend the canonical residential sorting equilibrium framework to include commuting time in the household utility function. Content Type(s): Staff research, Staff working papers JEL Code(s): H, H4, H41, R, R2, R21, R4, R41 Research Theme(s): Financial markets and funds management, Market functioning, Models and tools, Economic models, Monetary policy, Real economy and forecasting
Sources of pandemic-era inflation in Canada: An application of the Bernanke and Blanchard model Staff analytical note 2024-13 Fares Bounajm, Jean Garry Junior Roc, Yang Zhang We explore the drivers of the surge in inflation in Canada during the COVID-19 pandemic. This work is part of a joint effort by 11 central banks using the model developed by Bernanke and Blanchard (2023) to identify similarities and differences across economies. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E2, E24, E3, E31, E37, E5, E52, E6 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
May 27, 2015 Bank of Canada maintains overnight rate target at 3/4 per cent Media Relations Ottawa, Ontario The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent. Content Type(s): Press, Press releases
November 23, 2004 Real Return Bonds: Monetary Policy Credibility and Short-Term Inflation Forecasting Bank of Canada Review - Autumn 2004 Christopher Reid, Frédéric Dion, Ian Christensen The break-even inflation rate (BEIR) is calculated by comparing the yields on conventional and Real Return Bonds. Defined as the average rate of inflation that equates the expected returns on these two bonds, the BEIR has the potential to contain useful information about long-run inflation expectations. Yet the BEIR has been higher, on average, and more variable than survey measures of inflation expectations, which may be explained by the effects of premiums and distortions embedded in the BEIR. Because of the difficulty in accounting for these distortions, the BEIR should not be given a large weight as a measure of long-run inflation expectations at this time. However, as the Real Return Bond market continues to develop, the BEIR should become a more useful indicator of inflation expectations. At present, it demonstrates no clear advantage over survey measures and even past inflation rates in forecasting near-term inflation. Content Type(s): Publications, Bank of Canada Review articles
August 27, 2013 Exits, Spillovers and Monetary Policy Independence Remarks John Murray Canadian Association for Business Economics Kingston, Ontario Deputy Governor John Murray discusses exits from unconventional monetary policies, spillovers and monetary policy independence. Content Type(s): Press, Speeches and appearances, Remarks