March 12, 2012 Promoting Growth, Mitigating Cycles and Inequality: The Role of Price and Financial Stability Remarks Tiff Macklem Brazil-Canada Chamber of Commerce São Paulo, Brazil Senior Deputy Governor Tiff Macklem discusses how price and financial stability help promote growth and mitigate economic cycles and inequality. Content Type(s): Press, Speeches and appearances, Remarks
A vision for IMF Surveillance Staff Working Paper 2007-37 Robert Lavigne, Philipp Maier, Eric Santor The ongoing review of the IMF, initiated in 2005 by Managing Director De Rato, presents an excellent opportunity to re-examine the role, functions and governance of the Fund. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial stability, International topics JEL Code(s): F, F3, F33
November 16, 2017 An Update on the Neutral Rate of Interest Bank of Canada Review - Autumn 2017 José Dorich, Abeer Reza, Subrata Sarker The neutral rate serves as a benchmark for measuring monetary stimulus and provides a medium- to long-run anchor for the real policy rate. Global neutral rate estimates have been falling over the past few decades. Factors such as population aging, high corporate savings, and low trend productivity growth are likely to continue supporting a low global neutral rate. These global factors as well as domestic factors are exerting downward pres-sure on the Canadian real neutral rate, which is estimated to be between 0.5 to 1.5 per cent. This low neutral rate has important implications for monetary policy and financial stability. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Interest rates, International topics, Potential output, Recent economic and financial developments JEL Code(s): E, E4, E43, E5, E52, E58, F, F0, F01, F4, F43, O, O4
Search-for-Yield in Canadian Fixed-Income Mutual Funds and Monetary Policy Staff Working Paper 2014-3 Sermin Gungor, Jesus Sierra This paper investigates the effects of monetary policy on the risk-taking behavior of fixed-income mutual funds in Canada. We consider different measures of the stance of monetary policy and investigate active variation in mutual funds’ risk exposure in response to monetary policy. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Monetary policy transmission JEL Code(s): E, E5, E52, G, G2, G23
Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada Staff Discussion Paper 2018-18 Thomas J. Carter, Rhys R. Mendes, Lawrence L. Schembri In 1991, Canada became the second country to adopt an inflation target as a central pillar of its monetary policy framework. The regime has proven much more successful than initially expected, both in achieving price stability and in stabilizing the real economy against a wide range of shocks. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Credibility, Inflation targets, Monetary policy, Monetary policy framework JEL Code(s): E, E5, E52, E58, E6, E61
An Index of Financial Stress for Canada Staff Working Paper 2003-14 Mark Illing, Ying Liu The authors develop an index of financial stress for the Canadian financial system. Stress is defined as the force exerted on economic agents by uncertainty and changing expectations of loss in financial markets and institutions. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial markets JEL Code(s): E, E5, G, G1, G10
Systematic Risk, Debt Maturity and the Term Structure of Credit Spreads Staff Working Paper 2012-27 Hui Chen, Yu Xu, Jun Yang We build a dynamic capital structure model to study the link between systematic risk exposure and debt maturity, as well as their joint impact on the term structure of credit spreads. Our model allows for time variation and lumpiness in the maturity structure. Relative to short-term debt, long-term debt is less prone to rollover risks, but its illiquidity raises the costs of financing. Content Type(s): Staff research, Staff working papers Research Topic(s): Asset pricing, Debt management JEL Code(s): G, G3, G32, G33
Financial Stress, Monetary Policy, and Economic Activity Staff Working Paper 2010-12 Fuchun Li, Pierre St-Amant This paper examines empirically the impact of financial stress on the transmission of monetary policy shocks in Canada. The model used is a threshold vector autoregression in which a regime change occurs if financial stress conditions cross a critical threshold. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial stability, Monetary policy and uncertainty JEL Code(s): C, C0, C01, E, E5, E50, G, G0, G01
How Do Agents Form Macroeconomic Expectations? Evidence from Inflation Uncertainty Staff Working Paper 2024-5 Tao Wang The uncertainty regarding inflation that is observed in density forecasts of households and professionals helps macroeconomists understand the formation mechanism of inflation expectations. Shocks to inflation take time to be perceived by all agents in the economy, and such rigidity is lower in a high-inflation environment. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Inflation and prices, Monetary policy and uncertainty JEL Code(s): D, D8, D84, E, E3, E31, E7, E71
Government Corruption and Foreign Direct Investment Under the Threat of Expropriation Staff Working Paper 2016-13 Christopher Hajzler, Jonathan Rosborough Foreign investment is often constrained by two forms of political risk: expropriation and corruption. We examine the role of government corruption in foreign direct investment (FDI) when contracts are not fully transparent and investors face the threat of expropriation. Content Type(s): Staff research, Staff working papers Research Topic(s): Development economics, Economic models, International topics JEL Code(s): F, F2, F21, F23, F3, F34