A Model of Tiered Settlement Networks Staff Working Paper 2008-12 James Chapman, Jonathan Chiu, Miguel Molico This paper develops a model of settlement system to study the endogenous structure of settlement networks, and the welfare consequences of clearing agent failure. The equilibrium degree of tiering is endogenously determined by the cost structure and the information structure. Content Type(s): Staff research, Staff working papers Research Topic(s): Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E58, G, G2, G21
Markups in Canada: Have They Changed and Why? Staff Working Paper 2008-7 Danny Leung Many empirical studies have examined the cyclical nature of the markup ratio. Until recently, few have attempted to ascertain the changes in the markup over a longer time horizon. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods JEL Code(s): E, E3, E31, F, F4, F41, L, L1, L11
What to Expect When China Liberalizes Its Capital Account Staff Discussion Paper 2016-10 Mark Kruger, Gurnain Pasricha When China joined the World Trade Organization in December 2001, it marked a watershed for the world economy. Ten years from now, the opening of China’s capital account and the financial integration that will unfold will be viewed as a milestone of similar importance. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Balance of payments and components, Exchange rate regimes, International topics JEL Code(s): F, F3, F31, F32, G, G1, G18
Monetary Policy Transmission during Financial Crises: An Empirical Analysis Staff Working Paper 2014-21 Tatjana Dahlhaus This paper studies the effects of a monetary policy expansion in the United States during times of high financial stress. The analysis is carried out by introducing a smooth transition factor model where the transition between states (“normal” and high financial stress) depends on a financial conditions index. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Financial markets, Monetary policy transmission JEL Code(s): C, C1, C11, C3, C32, E, E3, E32, E4, E44, G, G0, G01
December 10, 2007 Inflation Targeting, Price-Level Targeting, and Fluctuations in Canada's Terms of Trade Bank of Canada Review - Winter 2007-2008 Donald Coletti, René Lalonde Coletti and Lalonde compare inflation targeting and price-level targeting in the context of a small open economy subject to sizable terms-of-trade shocks. The authors summarize recent research that compares the ability of price-level targeting and inflation targeting to stabilize the macroeconomy when confronted with shocks similar to those experienced by Canada in recent years. Their preliminary results suggest that price-level targeting may represent a feasible alternative to traditional inflation targeting. Their article also provides insight into the direction of current research in this area at the Bank. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Central bank research, Inflation and prices, Monetary policy framework
Uninsurable Investment Risks and Capital Income Taxation Staff Working Paper 2009-3 Césaire Meh, Yaz Terajima This paper studies the capital accumulation and welfare implications of reducing capital income taxation in a general equilibrium economy with uninsurable investment risks. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models JEL Code(s): E, E2, E21, E22, E6, E62, G, G3, G32, H, H2, H24, H25
Les provinces canadiennes et la convergence : une évaluation empirique Staff Working Paper 1994-10 Mario Lefebvre This paper examines whether the hypothesis of economic convergence holds for the Canadian provinces. Using data on real gross domestic product per capita and on factor productivity from 1966 to 1992, the paper shows, using two different methods, that the convergence hypothesis cannot be rejected. This evidence supports the findings of other authors who have studied convergence among Canadian provinces. Content Type(s): Staff research, Staff working papers Research Topic(s): Recent economic and financial developments
Occasionally Binding Constraints in Large Models: A Review of Solution Methods Staff Discussion Paper 2021-5 Jonathan Swarbrick Solving macroeconomic models is difficult. One challenge is the occasionally binding constraint of the zero lower bound on nominal interest rates. This paper reviews various ways to solve models that include this feature. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): C, C6
Building New Plants or Entering by Acquisition? Estimation of an Entry Model for the U.S. Cement Industry Staff Working Paper 2011-1 Héctor Pérez Saiz In many industries, firms usually have two choices when expanding into new markets: They can either build a new plant (greenfield entry) or they can acquire an existing incumbent. In the U.S. cement industry, the comparative advantage (e.g., TFP or size) of entrants versus incumbents and regulatory entry barriers are important factors that determine the means of expansion. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Market structure and pricing, Productivity JEL Code(s): L, L1, L13, L4, L40, L6, L61
Cash Versus Card: Payment Discontinuities and the Burden of Holding Coins Staff Working Paper 2017-47 Heng Chen, Kim Huynh, Oz Shy Cash is the preferred method of payment for small value transactions generally less than $25. We provide insight to this finding with a new theoretical model that characterizes and compares consumers’ costs of paying with cash to paying with cards for each transaction. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes, Econometric and statistical methods JEL Code(s): D, D0, D03, E, E4, E42