October 24, 2016 Renewal of the Inflation-Control Target (October 2016) Commentary and technical data relating to the 2016 target renewal. Content Type(s): Background materials Research Topic(s): Inflation and prices, Monetary policy
Inflation and the Tax System in Canada: An Exploratory Partial-Equilibrium Analysis Staff Working Paper 2000-18 Brian O'Reilly, Mylène Levac This paper reports on an exploratory application to Canadian data of an approach pioneered by Martin Feldstein (1997, 1999). Feldstein finds that even at low inflation rates there are costs arising from the distortions introduced by the interaction of inflation with the taxation of income from capital (capital gains, dividends, and interest) in a less-than-perfectly-indexed tax system. Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation: costs and benefits JEL Code(s): E, E5, E6
May 16, 2016 A New Era of Central Banking: Unconventional Monetary Policies Bank of Canada Review - Spring 2016 Eric Santor, Lena Suchanek Central banks can implement unconventional monetary policy measures to provide additional easing when policy interest rates come close to their lower limit. To date, the international experience with tools such as quantitative easing and negative interest rates has been largely positive. Central banks may also use several such measures simultaneously, with often mutually reinforcing effects. Yet, unconventional tools are also subject to potential limits, and the costs associated with these measures could rise with extensive and prolonged use. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Interest rates, International topics, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E61, E65
Does US or Canadian Macro News Drive Canadian Bond Yields? Staff Analytical Note 2018-38 Bruno Feunou, Rodrigo Sekkel, Morvan Nongni-Donfack We show that a large share of low-frequency (quarterly) movements in Canadian government bond yields can be explained by macroeconomic news, even though high-frequency (daily) changes are driven by other shocks. Furthermore, we show that US macro news—not domestic news— explains most of the quarterly variation in Canadian bond yields. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial markets, International topics, Monetary policy JEL Code(s): C, C2, C22, E, E4, E43
A Model of Housing Stock for Canada Staff Working Paper 2010-19 David Dupuis, Yi Zheng Using an error-correction model (ECM) framework, the authors attempt to quantify the degree of disequilibrium in Canadian housing stock over the period 1961–2008 for the national aggregate and over 1981–2008 for the provinces. Content Type(s): Staff research, Staff working papers Research Topic(s): Domestic demand and components JEL Code(s): E, E2, E21, J, J0, J00
Why Do Emerging Markets Liberalize Capital Outflow Controls? Fiscal versus Net Capital Flow Concerns Staff Working Paper 2013-21 Joshua Aizenman, Gurnain Pasricha In this paper, we provide empirical evidence on the factors that motivated emerging economies to change their capital outflow controls in recent decades. Liberalization of capital outflow controls can allow emerging-market economies (EMEs) to reduce net capital inflow (NKI) pressures, but may cost their governments the fiscal revenues that external financial repression generates. Content Type(s): Staff research, Staff working papers Research Topic(s): Debt management, Financial system regulation and policies, International topics, Recent economic and financial developments JEL Code(s): F, F3, F32, G, G1, G15
Balance Sheets of Financial Intermediaries: Do They Forecast Economic Activity? Staff Working Paper 2014-40 Rodrigo Sekkel This paper conducts a real-time, out-of-sample analysis of the forecasting power of various aggregate financial intermediaries’ balance sheets to a wide range of economic activity measures in the United States. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods JEL Code(s): C, C5, C53
Digitalization: Implications for Monetary Policy Staff Discussion Paper 2023-18 Vivian Chu, Tatjana Dahlhaus, Christopher Hajzler, Pierre-Yves Yanni We explore the implications of digitalization for monetary policy, both in terms of how monetary policy affects the economy and in terms of data analysis and communication with the public. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Digitalization, Inflation and prices, Market structure and pricing, Monetary policy, Monetary policy communications, Monetary policy transmission JEL Code(s): C, C4, C8, E, E3, E31, E32, E5, E52
Core Inflation Technical Report No. 89 Seamus Hogan, Marianne Johnson, Thérèse Laflèche The Bank of Canada uses core CPI inflation, the year-over-year rate of change of the consumer price index excluding food, energy, and the effects of changes in indirect taxes, as the operational guide for monetary policy. Content Type(s): Staff research, Technical reports Research Topic(s): Inflation and prices JEL Code(s): E, E3, E31
Innovation and Growth with Financial, and Other, Frictions Staff Working Paper 2011-25 Jonathan Chiu, Césaire Meh, Randall Wright The generation and implementation of ideas, or knowledge, is crucial for economic performance. We study this process in a model of endogenous growth with frictions. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Potential output, Productivity JEL Code(s): E, E4, G, G2, O, O3, O4