Does Outward Foreign Investment Matter for Canadian Productivity? Evidence from Greenfield Investments Staff Working Paper 2018-31 Naveen Rai, Lena Suchanek, Maria Bernier This paper seeks to understand how outward foreign direct investment (FDI) affects the productivity of Canadian firms. We estimate the impact of outward greenfield investment on measures of firm-level productivity using FDI data from roughly 2,000 Canadian firms and more than 4,000 outward FDI projects over the 2003–14 period. Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Productivity JEL Code(s): D, D2, D24, F, F2, F21, F23
A Simple Method for Extracting the Probability of Default from American Put Option Prices Staff Working Paper 2020-15 Bo Young Chang, Greg Orosi A put option is a financial contract that gives the holder the right to sell an asset at a specific price by (or at) a specific date. A put option can therefore provide its holder insurance against a large drop in the stock price. This makes the prices of put options an ideal source of information for a market-based measure of the probability of a firm’s default. Content Type(s): Staff research, Staff working papers Research Topic(s): Asset pricing, Financial markets, Market structure and pricing JEL Code(s): G, G1, G13, G3, G33
On the Existence and Fragility of Repo Markets Staff Working Paper 2012-17 Hajime Tomura This paper presents a model of an over-the-counter bond market in which bond dealers and cash investors arrange repurchase agreements (repos) endogenously. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, Financial stability, Payment clearing and settlement systems JEL Code(s): G, G2, G24
Understanding Inflation Dynamics: The Role of Government Expenditures Staff Working Paper 2023-30 Chang Liu, Yinxi Xie We study the impact government expenditure has on inflation. We find that changes in government expenditure account for a substantial portion of inflation variations. We also find that inflation and inflation expectations respond negatively to fiscal spending shocks, reaffirming the supply-side channel through which inflation responds to fiscal expansions. Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Fiscal policy, Inflation and prices JEL Code(s): E, E3, E6, E62, E63
Trade Credit and Credit Rationing in Canadian Firms Staff Working Paper 2004-49 Rose Cunningham Burkart and Ellingsen's (2004) model of trade credit and bank credit rationing predicts that trade credit will be used by medium-wealth and low-wealth firms to help ease bank credit rationing. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Financial markets JEL Code(s): G, G1, G14, G2, G21, G3, G32
Estimating Large-Dimensional Connectedness Tables: The Great Moderation Through the Lens of Sectoral Spillovers Staff Working Paper 2021-37 Felix Brunner, Ruben Hipp Understanding the size of sectoral links is crucial to predicting the impact of a crisis on the whole economy. We show that statistical learning techniques substantially outperform traditional estimation techniques when measuring large networks of these links. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods JEL Code(s): C, C2, C22, C5, C52, E, E2, E23, E27
September 20, 2022 Macroeconomics of the 2020s: What we’ve learned, and what’s to come Remarks Paul Beaudry University of Waterloo Faculty of Arts Distinguished Lecture in Economics Waterloo, Ontario Deputy Governor Paul Beaudry discusses the macroeconomic lessons we’ve learned during the COVID-19 pandemic, and what lies ahead to bring inflation back to target. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Coronavirus disease (COVID-19), Expectations, Inflation and prices, Inflation targets, International topics, Labour markets, Monetary policy implementation, Recent economic and financial developments
Benchmarks for assessing labour market health: 2023 update Staff Analytical Note 2023-7 Erik Ens, Kurt See, Corinne Luu We enhance benchmarks for assessing strength in the Canadian labour market. We find the labour market remains tight despite recent strong increases in labour supply, including among prime-working-age women. We also assess the anticipated easing in labour conditions in a context of high population growth. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Business fluctuations and cycles, Coronavirus disease (COVID-19), Econometric and statistical methods, Labour markets, Monetary policy JEL Code(s): E, E2, E24, J, J2, J21, J6
January 10, 2011 Household Finances and Economic Growth Remarks Agathe Côté Canadian Club of Kingston Kingston, Ontario Why does household financial health matter to the Bank of Canada? It matters because how Canadians spend and how much they spend affect both the conduct of monetary policy and the stability of the financial system. Content Type(s): Press, Speeches and appearances, Remarks
The Implications of Transmission and Information Lags for the Stabilization Bias and Optimal Delegation Staff Working Paper 2004-37 Jean-Paul Lam, Florian Pelgrin In two recent papers, Jensen (2002) and Walsh (2003), using a hybrid New Keynesian model, demonstrate that a regime that targets either nominal income growth or the change in the output gap can effectively replicate the outcome under commitment and hence reduce the size of the stabilization bias. Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation targets, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E62