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Using a novel data set for 17 countries dating from 1900 to 2013, we characterize business cycles in both small developed and developing countries in a model with financial frictions and a common shock structure. We estimate the model jointly for these 17 countries using Bayesian methods.

Consumers’ perceptions of current inflation remain elevated and are diverging from actual inflation. Perceptions of high inflation are also leading to persistently high expectations for inflation over the next 12 months. Consumers’ expectations for interest rates one year from now also remain high, and many consumers believe that the impacts of higher interest rates on their household spending are far from over. Homeowners with a variable-rate mortgage are more likely than other consumers to report being worse off due to high interest rates. Consumers’ plans to purchase services, such as vacations or concerts, are more widespread than plans to make major purchases of goods that are likely to be financed with loans, such as vehicles or appliances. Workers are reporting signs of job market cooling, such as more time spent looking for a new job, but they remain confident about the labour market.

We develop a finite-sample procedure to test the beta-pricing representation of linear factor pricing models that is applicable even if the number of test assets is greater than the length of the time series. Our distribution-free framework leaves open the possibility of unknown forms of non-normalities, heteroskedasticity, time-varying correlations, and even outliers in the asset returns.

We build upon new developments in the international trade literature to isolate and quantify the long-run economic impacts of tariff changes on the United States and the global economy.

The Canadian dollar has declined against the US dollar since October 2024, mostly due to rising uncertainty around trade policies. A widening differential in policy interest rates between the two countries has also played a modest role.

Is shale oil production in the United States a factor in the 2014 oil price decline? Which methods of payment are commonly accepted by merchants in Canada? Bank researchers share their insights on these topics. They also provide an update on the neutral rate of interest as well as on changes to the Bank’s operational framework for market operations.

We use graphic processing unit computing to compare Bayesian and sample theory semiparametric binary response models. Our findings show that optimal bandwidth does not outperform regular bandwidth in binary semiparametric models.

We examine different monetary policy governance structures and discuss the important roles of non-legislated processes and practices. We also provide an update on monetary policy governance at the Bank of Canada and how it has evolved over time.

Can daycare replace parents’ time spent with children? We explore this by using data on how parents spend time and money on children and how this spending is related to their child’s development.

The ratio of non-financial corporate debt to gross domestic product in Canada has increased noticeably in recent years and is currently at an all-time high. In light of this development, we use a unique firm-level dataset to construct vulnerability indicators for the non-financial corporate sector in Canada.