The Role of International Financial Integration in Monetary Policy Transmission Staff Working Paper 2024-3 Jing Cynthia Wu, Yinxi Xie, Ji Zhang We propose an open-economy New Keynesian model with financial integration that allows financial intermediaries to hold foreign long-term bonds. We study the implications of financial integration on monetary policy transmission. Among various aspects of financial integration, the bond duration plays a major role. These results hold for conventional and unconventional monetary policies. Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, International financial markets, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E52, F, F3, F36, F4, F42
The Effect of Exchange Rate Movements on Heterogeneous Plants: A Quantile Regression Analysis Staff Working Paper 2010-25 Ben Tomlin, Loretta Fung In this paper, we examine how the effect of movements in the real exchange rate on manufacturing plants depends on the plant's placement within the productivity distribution. Appreciations of the local currency expose domestic plants to more competition from abroad as export opportunities shrink and import competition intensifies. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates, Market structure and pricing, Productivity JEL Code(s): D, D2, D21, F, F1, L, L1, L16, L6, L60
Trend Inflation, Wage and Price Rigidities, and Welfare Staff Working Paper 2007-42 Robert Amano, Kevin Moran, Stephen Murchison, Andrew Rennison This paper studies the steady-state costs of inflation in a general-equilibrium model with real per capita output growth and staggered nominal price and wage contracts. Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation: costs and benefits JEL Code(s): E, E0, E5
Time-Consistent Management of a Liquidity Trap with Government Debt Staff Working Paper 2018-38 Dmitry Matveev This paper studies optimal discretionary monetary and fiscal policy when the lower bound on nominal interest rates is occasionally binding in a model with nominal rigidities and long-term government debt. At the lower bound it is optimal for the government to temporarily reduce debt. Content Type(s): Staff research, Staff working papers Research Topic(s): Fiscal policy, Monetary policy JEL Code(s): E, E5, E52, E6, E62, E63
Institutional Quality, Trade, and the Changing Distribution of World Income Staff Working Paper 2006-19 Brigitte Desroches, Michael Francis Conventional wisdom holds that institutional changes and trade liberalization are two main sources of growth in per capita income around the world. Content Type(s): Staff research, Staff working papers Research Topic(s): Development economics, International topics JEL Code(s): F, F1, F11, F15, O, O1, O11, P, P4, P48
Inventories, Stockouts, and ToTEM Staff Discussion Paper 2010-8 Oleksiy Kryvtsov, Yang Zhang Inventory investment is an important component of the Canadian business cycle. Despite its small average size – less than 1 per cent of output – it exhibits volatile procyclical fluctuations, accounting for almost one-third of output variance. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Monetary policy transmission JEL Code(s): E, E3, E31, E32
Firm Size and Productivity Staff Working Paper 2008-45 Danny Leung, Césaire Meh, Yaz Terajima This paper examines the relationship between firm size and productivity. In contrast to previous studies, this paper offers evidence of the relationship not only from manufacturing firms, but from non-manufacturing firms as well. Content Type(s): Staff research, Staff working papers Research Topic(s): Productivity JEL Code(s): L, L1, L11, L2, L25, O, O4, O47
Assessing global potential output growth and the US neutral rate: April 2022 Staff Analytical Note 2022-4 Kyle Boutilier, Thomas J. Carter, Xin Scott Chen, Eshini Ekanayake, Louis Poirier, Peter Shannon, Akash Uppal, Lin Xiang We expect global potential output growth to increase from 2.7% in 2021 to 2.9% by 2024. Compared with the April 2021 assessment, global potential output growth is marginally slower. The current range for the US neutral rate is 2% to 3%, 0.25 percentage points higher than staff’s last assessment. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Interest rates, Monetary policy, Potential output, Productivity JEL Code(s): E, E1, E2, E4, E5, F, F0, O, O4
Did U.S. Consumers Respond to the 2014–2015 Oil Price Shock? Evidence from the Consumer Expenditure Survey Staff Working Paper 2018-13 Patrick Alexander, Louis Poirier The impact of oil price shocks on the U.S. economy is a topic of considerable debate. In this paper, we examine the response of U.S. consumers to the 2014–2015 negative oil price shock using representative survey data from the Consumer Expenditure Survey. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Domestic demand and components, Recent economic and financial developments JEL Code(s): D, D1, D12, E, E2, E21, Q, Q4, Q43
Measures of Aggregate Credit Conditions and Their Potential Use by Central Banks Staff Discussion Paper 2009-12 Alejandro García, Andrei Prokopiw Understanding the nature of credit risk has important implications for financial stability. Since authorities – notably, central banks – focus on risks that have systemic implications, it is crucial to develop ways to measure these risks. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Credit and credit aggregates, Financial markets, Financial stability JEL Code(s): G, G1, G10, G12, G13