Growth in Emerging Market Economies and the Commodity Boom of 2003–2008: Evidence from Growth Forecast Revisions Staff Working Paper 2012-8 Elif Arbatli, Garima Vasishtha Demand for industrial raw materials from emerging economies, particularly emerging Asia, is widely believed to have fueled the surge in oil and industrial commodity prices during 2002-2008. The paper first presents a simple storage model in which commodity prices respond to market participant’s changing expectations of the future macroeconomic environment. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, International topics JEL Code(s): Q, Q4, Q41, Q43
International Financial Crises and Flexible Exchange Rates: Some Policy Lessons from Canada Technical Report No. 88 John Murray, Mark Zelmer, Zahir Antia This paper examines the behaviour of the Canadian dollar from 1997 to 1999 to see if there is any evidence of excess volatility or significant overshooting. A small econometric model of the exchange rate, based on market fundamentals, is presented and used to make tentative judgments about the extent to which the currency might have been systematically over- or undervalued. Content Type(s): Staff research, Technical reports Research Topic(s): Exchange rate regimes, Exchange rates JEL Code(s): F, F3, F31
ToTEM III: The Bank of Canada’s Main DSGE Model for Projection and Policy Analysis Technical Report No. 119 Paul Corrigan, Hélène Desgagnés, José Dorich, Vadym Lepetyuk, Wataru Miyamoto, Yang Zhang ToTEM III is the most recent generation of the Bank of Canada’s main dynamic stochastic general equilibrium model for projection and policy analysis. The model helps Bank staff tell clear and coherent stories about the Canadian economy’s current state and future evolution. Content Type(s): Staff research, Technical reports Research Topic(s): Business fluctuations and cycles, Economic models, Housing, Interest rates, Monetary policy JEL Code(s): E, E1, E17, E2, E20, E3, E30, E4, E40, E5, E50, E6, E62, E65, F, F4, F40, F41, G, G5, G51
A Financial Stability Analysis of Zombie Firms in Canada Staff Analytical Note 2020-3 Timothy Grieder, Juan Ortega We measure the prevalence of zombie firms in Canada and assess how they could potentially affect the financial system. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Credit and credit aggregates, Financial stability, Sectoral balance sheet JEL Code(s): G, G3, G32
February 15, 2018 Anchoring Expectations: Canada’s Approach to Price Stability Remarks Lawrence L. Schembri Manitoba Association for Business Economists Winnipeg, Manitoba Deputy Governor Lawrence Schembri examines the success of the Bank’s monetary policy framework and explains the review being undertaken before its renewal in 2021. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Central bank research, Credibility, Fiscal policy, Inflation and prices, Inflation targets, Monetary policy framework
Corporate Governance, Product Market Competition and Debt Financing Staff Working Paper 2014-5 Teodora Paligorova, Jun Yang This paper examines the impact of product market competition and corporate governance on the cost of debt financing and the use of bond covenants. We find that more anti-takeover provisions are associated with a lower cost of debt only in competitive industries. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets JEL Code(s): G, G1, G12, G3, G34
Strengthening IMF Surveillance: An Assessment of Recent Reforms Staff Discussion Paper 2009-10 Robert Lavigne, Lawrence L. Schembri The authors assess the potential impact of recently approved reforms to International Monetary Fund (IMF) surveillance; namely, the "2007 Decision on Bilateral Surveillance Over Members' Policies" and the "Statement of Surveillance Priorities" (SSP). They conclude that these complementary reforms have the potential to create a comprehensive and coherent framework for IMF surveillance. If implemented properly, […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): International topics JEL Code(s): F, F3, F33
The Impact of Sovereign Wealth Funds on International Financial Stability Staff Discussion Paper 2008-14 Tamara Gomes Over the recent period, many emerging-market economies and commodity-exporting nations have experienced unprecedented growth and accumulated substantial amounts of foreign exchange reserves. The management of these foreign reserves has led to the emergence of important financial actors: sovereign wealth funds (SWFs). Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial stability, Recent economic and financial developments JEL Code(s): F, F2, F21, F3, F31, F32, G, G1, G15
Adverse Selection, Liquidity, and Market Breakdown Staff Working Paper 2010-32 Koralai Kirabaeva This paper studies the interaction between adverse selection, liquidity risk and beliefs about systemic risk in determining market liquidity, asset prices and welfare. Even a small amount of adverse selection in the asset market can lead to fire-sale pricing and possibly to a market breakdown if it is accompanied by a flight-to-liquidity, a misassessment of systemic risk, or uncertainty about asset values. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial markets, Financial stability JEL Code(s): D, D8, D82, G, G0, G01, G1, G11
Cash and COVID-19: What happened in 2021 Staff Discussion Paper 2022-8 Heng Chen, Walter Engert, Kim Huynh, Daneal O’Habib, Joy Wu, Julia Zhu Using data from the Bank Note Distribution System and consumer surveys, we find that bank notes in circulation remained high through 2021. Canadians continued to rely on electronic methods of payment, but a significant share also continued using cash for payments. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Central bank research, Coronavirus disease (COVID-19), Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C1, C12, C9, E, E4, O, O5, O54