Changes in Monetary Regimes and the Identification of Monetary Policy Shocks: Narrative Evidence from Canada Staff Working Paper 2017-39 Julien Champagne, Rodrigo Sekkel We use narrative evidence along with a novel database of real-time data and forecasts from the Bank of Canada's staff economic projections from 1974 to 2015 to construct a new measure of monetary policy shocks and estimate the effects of monetary policy in Canada. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Central bank research, Econometric and statistical methods, Exchange rate regimes, Inflation and prices, Inflation targets, Interest rates, Monetary policy, Monetary policy framework JEL Code(s): E, E3, E31, E32, E4, E43, E5, E52, E58
Stability and Efficiency in Decentralized Two‐Sided Markets with Weak Preferences Staff Working Paper 2017-4 Radoslav Raykov Many decentralized markets are able to attain a stable outcome despite the absence of a central authority (Roth and Vande Vate, 1990). A stable matching, however, need not be efficient if preferences are weak. This raises the question whether a decentralized market with weak preferences can attain Pareto efficiency in the absence of a central matchmaker. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models JEL Code(s): C, C7, C78, D, D6, D61
The Carrot and the Stick: The Business Cycle Implications of Incentive Pay in the Labor Search Model Staff Working Paper 2015-35 Julien Champagne This paper considers a real business cycle model with labor search frictions where two types of incentive pay are explicitly introduced following the insights from the micro literature on performance pay (e.g. Lazear, 1986). Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Labour markets JEL Code(s): E, E2, E24, J, J3, J33, J4, J41
Shock Transmission Through International Banks: Canada Technical Report No. 105 James Chapman, H. Evren Damar In this paper, we investigate how liquidity conditions in Canada may affect domestic and/or foreign lending of globally active banks and whether this transmission is influenced by individual bank characteristics. Content Type(s): Staff research, Technical reports Research Topic(s): Financial institutions, Financial stability JEL Code(s): E, E4, E44, F, F3, F36, G, G2, G21, G3, G32
MUSE: The Bank of Canada's New Projection Model of the U.S. Economy Technical Report No. 96 Marc-André Gosselin, René Lalonde The analysis and forecasting of developments in the U.S. economy have always played a critical role in the formulation of Canadian economic and financial policy. Thus, the Bank places considerable importance on generating internal forecasts of U.S. economic activity as an input to the Canadian projection. Content Type(s): Staff research, Technical reports Research Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): C, C5, C53, E, E1, E17, E2, E27, E3, E37, F, F1, F17
A New Approach to Infer Changes in the Synchronization of Business Cycle Phases Staff Working Paper 2014-38 Danilo Leiva-Leon This paper proposes a Markov-switching framework to endogenously identify the following: (1) regimes where economies synchronously enter recessionary and expansionary phases; and (2) regimes where economies are unsynchronized, essentially following independent business cycles. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Regional economic developments JEL Code(s): C, C3, C32, C4, C45, E, E3, E32
August 19, 2010 Price-Level Targeting and Relative-Price Shocks Bank of Canada Review - Summer 2010 Stephen Murchison Stephen Murchison reviews the findings of recent Bank of Canada research on the relative merits of inflation targeting and price-level targeting (PLT) for a small open economy, such as Canada's, that is susceptible to large and persistent terms-of-trade shocks. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Central bank research, Inflation targets, Monetary policy framework
Optimal Monetary Policy According to HANK Staff Working Paper 2021-55 Sushant Acharya, Edouard Challe, Keshav Dogra We study optimal monetary policy in an analytically tractable Heterogeneous Agent New Keynesian model. In the model, the central bank has an incentive to reduce consumption inequality in addition to keeping economic activity at its efficient level and inflation stable. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Monetary policy JEL Code(s): E, E2, E21, E3, E30, E5, E52, E6, E62, E63
Asset Encumbrance, Bank Funding and Financial Fragility Staff Working Paper 2016-16 Kartik Anand, Prasanna Gai, James Chapman, Toni Ahnert In this piece we show that a limit on the level of asset encumbrance and minimum capital requirements are effective tools for minimizing the incentive for banks to take excessive risk. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): D, D8, D82, G, G0, G01, G2, G21, G28
Furor over the Fed : Presidential Tweets and Central Bank Independence Staff Analytical Note 2019-33 Antoine Camous, Dmitry Matveev We illustrate how market data can be informative about the interactions between monetary and fiscal policy. Federal funds futures are private contracts that reflect investor’s expectations about monetary policy decisions. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Central bank research, Credibility, Financial markets, Monetary policy JEL Code(s): E, E4, E44, E5, E52, E58