Measuring household financial stress in Canada using consumer surveys Staff Analytical Note 2024-5 Nicolas Bédard, Patrick Sabourin We use data from the Canadian Survey of Consumer Expectations to understand how households are coping with high inflation and high interest rates. We build a subjective measure of financial stress and find that the level of stress is at a historical high but remains manageable for most households. Content Type(s): Staff research, Staff analytical notes Topic(s): Domestic demand and components, Financial stability, Monetary policy transmission, Recent economic and financial developments JEL Code(s): D, D1, D14, G, G5, H, H3
Borrow Now, Pay Even Later: A Quantitative Analysis of Student Debt Payment Plans Staff Working Paper 2023-54 Michael Boutros, Nuno Clara, Francisco Gomes We investigate alternative student debt contracts that defer payments and ease the burden of student loans on US households by preserving disposable income early in borrowers’ lives. Our model shows substantial welfare gains from these contracts relative to existing plans and gains similar to the Biden administration's proposals but with a significantly lower cost. Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Economic models, Financial markets, Labour markets, Market structure and pricing JEL Code(s): E, E2, G, G5, H, H3
What People Believe About Monetary Finance and What We Can(’t) Do About It: Evidence from a Large-Scale, Multi-Country Survey Experiment Staff Working Paper 2023-36 Cars Hommes, Julien Pinter, Isabelle Salle We conduct a large-scale survey to shed light on what people believe about public finance. An experiment demonstrates that central bank communication can persistently shift views on monetary financing. It further suggests that views on monetary financing impact support for fiscal discipline. Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Fiscal policy, Monetary policy JEL Code(s): C, C8, C83, E, E5, E58, E6, E60, E62, E7, E70, G, G5, G53, H, H3, H31
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 Topic(s): Coronavirus disease (COVID-19), Financial stability, Financial system regulation and policies JEL Code(s): E, E5, E58, E6, E61, G, G2, G21, H, H3, H8, H84
Monetary Policy, Trends in Real Interest Rates and Depressed Demand Staff Working Paper 2021-27 Paul Beaudry, Césaire Meh Over the last few decades, real interest rates have trended downward. The most common explanation is that this reflects depressed demand due to demographic, technological and other real factors. We explore the claim that these trends may have been amplified by certain features of monetary policy. Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Economic models, Fiscal policy, Inflation and prices, Interest rates, Monetary policy JEL Code(s): E, E2, E4, E43, E44, E5, E52, E6, E62, E63, H, H3, H6, H63
Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform Staff Working Paper 2021-15 Gabriela Galassi How do firms change their employment decisions when tax benefits for low-earning workers are expanded? Some firms increase employment overall, whereas others replace high-earning workers with low-earning workers, according to German linked employer-employee data. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Firm dynamics, Labour markets JEL Code(s): E, E2, E24, E6, E64, H, H2, H20, H24, H3, H32, I, I3, I38, J, J2, J23, J3, J38
Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments Staff Working Paper 2020-36 Elizabeth Caucutt, Lance Lochner, Joseph Mullins, Youngmin Park Can daycare replace parents’ time spent with children? We explore this by using data on how parents spend time and money on children and how this spending is related to their child’s development. Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Labour markets, Potential output, Productivity JEL Code(s): D, D1, D13, H, H3, H31, J, J2, J22, J24
Sources of Borrowing and Fiscal Multipliers Staff Working Paper 2018-32 Romanos Priftis, Srecko Zimic This paper finds that debt-financed government spending multipliers vary considerably depending on the location of the debt buyer. In a sample of 33 countries, we find that government spending multipliers are larger when government purchases are financed by issuing debt to foreign investors (non-residents), compared with when government purchases are financed by issuing debt to home investors (residents). Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Economic models, Fiscal policy, International financial markets JEL Code(s): E, E2, E6, E62, F, F4, F41, H, H3
Debt Overhang and Deleveraging in the US Household Sector: Gauging the Impact on Consumption Staff Working Paper 2015-47 Bruno Albuquerque, Georgi Krustev Using a novel dataset for the US states, this paper examines whether household debt and the protracted debt deleveraging help explain the dismal performance of US consumption since 2007, in the aftermath of the housing bubble. Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Econometric and statistical methods, International topics JEL Code(s): C, C1, C13, C2, C23, C5, C52, D, D1, D12, H, H3, H31
Uncertain Fiscal Consolidations Staff Working Paper 2013-26 Huixin Bi, Eric M. Leeper, Campbell Leith The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition - either tax- or spending-based - are uncertain. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Monetary policy and uncertainty JEL Code(s): E, E6, E62, E63, H, H3, H30, H6, H60