December 14, 2007 The Costs of Inflation in New Keynesian Models Bank of Canada Review - Winter 2007-2008 Steve Ambler Ambler describes three new channels through which inflation affects economic welfare in New Keynesian models. These channels were absent from traditional analyses and may have caused researchers to underestimate the costs associated with variable inflation, even at relatively low levels of inflation. The article concludes with a preliminary assessment of the quantitative importance of the new channels and their significance for monetary policy. Content Type(s): Publications, Bank of Canada Review articles
Risk and State-Dependent Financial Frictions Staff working paper 2022-37 Martin Harding, Rafael Wouters Using a nonlinear New Keynesian model with a financial accelerator, we show that financial frictions generate large state-dependent amplification effects. Shocks propagate more strongly in periods of financial stress. We propose an endogenous regime-switching DSGE framework for efficient estimation and improved model fit. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E52, E58 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Models and tools, Economic models
The Evolution of the Chinese Housing Market and Its Impact on Base Metal Prices Staff discussion paper 2016-7 Mark Kruger, Kun Mo, Benjamin Sawatzky The Chinese housing market has grown rapidly following its liberalization in the 1990s, generating significant economic activity and demand for base metals. In this paper, we discuss the evolution of the Chinese housing market and quantify its importance for the overall Chinese economy and its linkages to base metal prices. Content Type(s): Staff research, Staff discussion papers JEL Code(s): Q, Q3, Q31, R, R3, R31 Research Theme(s): Financial markets and funds management, Market functioning, Monetary policy, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness
January 31, 2012 International Cross-Listing and the Bonding Hypothesis Financial System Review - June 2004 Michael R. King, Dan Segal Content Type(s): Publications, Financial System Review articles
Blockchain-Based Settlement for Asset Trading Staff working paper 2018-45 Jonathan Chiu, Thorsten Koeppl Can securities be settled on a blockchain and, if so, what are the gains relative to existing settlement systems? We consider a blockchain that ensures delivery versus payment by linking transfers of assets with payments and operates using a proof-of-work protocol. The main benefit of a blockchain is faster and more flexible settlement, whereas the challenge is to avoid settlement fails when participants fork the chain to get rid of trading losses. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G2, H, H4, P, P4, P43 Research Theme(s): Money and payments, Digital assets and fintech, Payment and financial market infrastructures
BoC–BoE Sovereign Default Database: Appendix and References Technical report No. 125 David Beers, Obiageri Ndukwe, Joe Berry Since 2014, the Bank of Canada (BoC) has maintained a comprehensive database of sovereign defaults to systematically measure and aggregate the nominal value of the different types of sovereign government debt in default. The database is posted on the BoC’s website and is updated annually in partnership with the Bank of England (BoE). Content Type(s): Staff research, Technical reports JEL Code(s): F, F3, F34, G, G1, G10, G14, G15 Research Theme(s): Financial markets and funds management, Funds management, Financial system, Financial stability and systemic risk
Average is Good Enough: Average-inflation Targeting and the ELB Staff working paper 2020-31 Robert Amano, Stefano Gnocchi, Sylvain Leduc, Joel Wagner The Great Recession and current pandemic have focused attention on the constraint on nominal interest rates from the effective lower bound. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E31, E32, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission
The BoC-BoE Sovereign Default Database: What’s New in 2019? Staff working paper 2019-39 David Beers, Patrisha de Leon-Manlagnit Until recently, few efforts have been made to systematically measure and aggregate the nominal value of the different types of sovereign government debt in default. To help fill this gap, the Bank of Canada (BoC) developed a comprehensive database of sovereign defaults that is posted on its website and updated in partnership with the Bank of England (BoE). Content Type(s): Staff research, Staff working papers JEL Code(s): F, F3, F34, G, G1, G10, G14, G15 Research Theme(s): Financial markets and funds management, Funds management, Financial system, Financial stability and systemic risk
COVID-19 and Financial Stability: Practice Ahead of Theory Staff discussion paper 2022-18 Jing Yang, Hélène Desgagnés, Grzegorz Halaj, Yaz Terajima The COVID-19 pandemic uncovered policy challenges related to the economic measures that were taken to support the economy. Two years later, we attempt to identify the broader impact of these measures and research that needs to follow. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E5, E58, E6, E61, G, G2, G21, H, H3, H8, H84 Research Theme(s): Financial system, Financial stability and systemic risk, Financial system regulation and oversight, Household and business credit, Monetary policy, Real economy and forecasting
August 19, 2010 Should Monetary Policy Be Used to Counteract Financial Imbalances? Bank of Canada Review - Summer 2010 Jean Boivin, Césaire Meh, Timothy Lane The authors examine whether monetary policy should and could do more to lean against financial imbalances (such as those associated with asset-price bubbles or unsustainable credit expansion) as they are building up, or whether its role should be limited to cleaning up the economic consequences as the imbalances unwind. Content Type(s): Publications, Bank of Canada Review articles