Cash and COVID-19: The impact of the second wave in Canada Staff Discussion Paper 2021-12 Heng Chen, Walter Engert, Marie-Hélène Felt, Kim Huynh, Gradon Nicholls, Daneal O’Habib, Julia Zhu The COVID-19 pandemic significantly increased the demand for cash. Cash in circulation increased sharply from March through December 2020, particularly in the early months of this period. Although use of electronic methods of payment also increased significantly, cash use for payments remains high for low-value transactions and among certain demographic groups. Content Type(s): Staff research, Staff discussion papers 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
How Long is Forever in the Laboratory? Three Implementations of an Infinite-Horizon Monetary Economy Staff Working Paper 2021-16 Janet Hua Jiang, Daniela Puzzello, Cathy Zhang Standard monetary models adopt an infinite horizon with discounting. Testing these models in the lab requires implementing this horizon within a limited time frame. We compare three approaches to such an implementation and discuss their relative advantages. Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Economic models, Inflation and prices JEL Code(s): C, C9, C92, D, D8, D83, E, E4, E40
Cash and COVID-19: The Effects of Lifting Containment Measures on Cash Demand and Use Staff Discussion Paper 2021-3 Heng Chen, Walter Engert, Kim Huynh, Gradon Nicholls, Julia Zhu Using Bank Note Distribution System data on the demand for cash up to September 2020, we find that demand was strong. This is true even though cash use for payments declined early in the pandemic. When mobility restrictions and lockdown measures were eased, cash use for payments increased sharply but remained less popular than electronic methods of payment. Content Type(s): Staff research, Staff discussion papers 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
2019 Cash Alternative Survey Results Staff Discussion Paper 2020-8 Kim Huynh, Gradon Nicholls, Mitchell Nicholson The role of cash in Canadians’ lives has been evolving, as innovations in digital payments have become more widely adopted over the past decade. We contribute to the Bank of Canada’s research on central bank digital currency by monitoring Canadians’ use of cash and their adoption of digital payment methods. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Central bank research, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C1, C12, C9, E, E4, O, O5, O51
Ten Isn’t Large! Group Size and Coordination in a Large-Scale Experiment Staff Working Paper 2020-30 Jasmina Arifovic, Cars Hommes, Anita Kopányi-Peuker, Isabelle Salle Economic activities typically involve coordination among a large number of agents. These agents have to anticipate what other agents think before making their own decisions. Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial stability JEL Code(s): C, C9, C92, D, D8, D83, D9, D90, G, G2, G20
Cash and COVID-19: The impact of the pandemic on demand for and use of cash Staff Discussion Paper 2020-6 Heng Chen, Walter Engert, Kim Huynh, Gradon Nicholls, Mitchell Nicholson, Julia Zhu Consumer spending declined significantly during the recent COVID-19 pandemic. This negative shock likely reduced spending across all methods of payment (cash, debit, credit, etc.). The mix of payment methods consumers use could also be affected. We study how the pandemic has influenced the demand for and use of cash. We also offer insights into the use of other payment methods, such as debit and credit cards. Content Type(s): Staff research, Staff discussion papers 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
CBDC adoption and usage: some insights from field and laboratory experiments Staff Analytical Note 2020-12 Janet Hua Jiang This note discusses insights from historical launches of new payment methods and related laboratory experiments on the potential adoption and use of a central bank digital currency in the Canadian context. Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Digital currencies and fintech JEL Code(s): C, C9, E, E4, E5, E58
Monetary Payoff and Utility Function in Adaptive Learning Models Staff Working Paper 2019-50 Erhao Xie When players repeatedly face an identical or similar game (e.g., coordination game, technology adoption game, or product choice game), they may learn through experience to perform better in the future. This learning behaviour has important economic implications. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Economic models JEL Code(s): C, C5, C57, C7, C72, C9, C92
The Formation of House Price Expectations in Canada: Evidence from a Randomized Information Experiment Staff Analytical Note 2019-24 Marc-André Gosselin, Mikael Khan, Matthieu Verstraete We conduct a randomized information experiment leveraging the Canadian Survey of Consumer Expectations. We provide causal evidence that respondents revise both their short- and medium-term expectations of future house price growth in a way that is consistent with observed short-term momentum in house prices. However, empirically, house price growth tends to revert to its mean in the medium term. Content Type(s): Staff research, Staff analytical notes Topic(s): Financial stability, Housing JEL Code(s): C, C9, D, D8, D84, R, R2, R21
Are Long-Horizon Expectations (De-)Stabilizing? Theory and Experiments Staff Working Paper 2019-27 George Evans, Cars Hommes, Isabelle Salle, Bruce McGough Most models in finance assume that agents make trading plans over the infinite future. We consider instead that they are boundedly rational and may only form forecasts over a limited horizon. Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Central bank research, Economic models, Financial markets JEL Code(s): C, C9, C92, D, D8, D84, E