Safe Payments Staff Working Paper 2020-53 Jonathan Chiu, Mohammad Davoodalhosseini, Janet Hua Jiang, Yu Zhu In a cashless economy, would the private sector invest in the optimal level of safety in a deposit-based payment system? In general, because of externalities, the answer is no. While the private sector could over- or under-invest in safety, the government can use taxes or subsidies to correct private incentives. Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Digital currencies and fintech, Financial institutions, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E50, G, G2, G21
State Dependence in Fundamentals and Preferences Explains Risk-Aversion Puzzle Staff Working Paper 2005-9 Fousseni Chabi-Yo, René Garcia, Eric Renault The authors examine the ability of economic models with regime shifts to rationalize and explain the risk-aversion and pricing-kernel puzzles put forward in Jackwerth (2000). Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, Market structure and pricing JEL Code(s): G, G1, G12, G13
An Econometric Examination of the Trend Unemployment Rate in Canada Staff Working Paper 1996-7 Denise Côté, Doug Hostland This paper attempts to identify the trend unemployment rate, an empirical concept, using cointegration theory. The authors examine whether there is a cointegrating relationship between the observed unemployment rate and various structural factors, focussing neither on the non-accelerating-inflation rate of unemployment (NAIRU) nor on the natural rate of unemployment, but rather on the trend unemployment rate, which they define in terms of cointegration. Content Type(s): Staff research, Staff working papers Research Topic(s): Labour markets JEL Code(s): E, E2, E24
Heterogeneous Beliefs and Housing-Market Boom-Bust Cycles in a Small Open Economy Staff Working Paper 2009-15 Hajime Tomura This paper introduces heterogeneous beliefs among households in a small open economy model for the Canadian economy. The model suggests that simultaneous boom-bust cycles in house prices, output, investment, consumption and hours worked emerge when credit-constrained mortgage borrowers expect that future house prices will rise and this expectation is neither shared by savers nor realized ex-post. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Financial stability, Inflation targets JEL Code(s): E, E4, E44, E5, E52
June 21, 2009 Procyclicality and Compensation Financial System Review - June 2009 Étienne Bordeleau, Walter Engert Content Type(s): Publications, Financial System Review articles
Understanding the Time Variation in Exchange Rate Pass-Through to Import Prices Staff Discussion Paper 2017-12 Rose Cunningham, Min Jae Kim, Christian Friedrich, Kristina Hess In this paper, we analyze the presence of time variation in the pass-through from the nominal effective exchange rate to import prices for 24 advanced economies over the period 1995–2015. In line with earlier studies in the literature, we find substantial heterogeneity in the level of exchange rate pass-through across countries. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Exchange rates, Inflation and prices, International topics, Monetary policy transmission JEL Code(s): E, E3, E31, F, F3, F31, F4, F41
January 11, 2010 Bank of Canada Review - Winter 2009-2010 Causes and consequences of declining inflation persistence in Canada; the evolution of capital flows to emerging-market economies (EMEs) and the need for EMEs to implement policies that support capital flows; making bank notes accessible for Canadians living with blindness or low vision, sharing assessments of the suite of accessibility features on the current series of bank notes and plans for the next series. Content Type(s): Publications, Bank of Canada Review
Reviewing Canada’s Monetary Policy Implementation System: Does the Evolving Environment Support Maintaining a Floor System? Staff Discussion Paper 2023-10 Toni Gravelle, Ron Morrow, Jonathan Witmer At the onset of the pandemic, the Bank of Canada transitioned its framework for monetary policy implementation from a corridor system to a floor system, which it has since decided to maintain. We provide a comprehensive analysis of both frameworks and assess their relative merits based on five key criteria that define a sound framework. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Market structure and pricing, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): D, D4, D47, E, E4, E42, E5, E58
Redefining Financial Inclusion for a Digital Age: Implications for a Central Bank Digital Currency Staff Discussion Paper 2023-22 Alexandra Sutton-Lalani, Sebastian Hernandez, John Miedema, Jiamin Dai, Badr Omrane We explore quantitative and qualitative information about Canadians who face barriers to making digital payments. We also consider the implications of ongoing digitalization for modern financial inclusion and a potential central bank digital currency. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Accessibility, Bank notes, Central bank research, Digital currencies and fintech, Digitalization, Financial services JEL Code(s): A, A1, A14, E, E4, E42, E5, E50, I, I3, I31, O, O3, O33, O5, O51
November 13, 2015 Innovation, Central-Bank Style Remarks Carolyn A. Wilkins Rotman School of Management and Munk School of Global Affairs Toronto, Ontario Senior Deputy Governor Wilkins discusses how the Bank is tackling the most important strategic challenges facing central banks today and how innovative thinking is critical to its success. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Central bank research, Credibility, Economic models, Exchange rate regimes, Inflation targets, Monetary policy framework