Dynamic Consumer Cash Inventory Model Staff Working Paper 2025-22 Kim Huynh, Oleksandr Shcherbakov, André Stenzel We study consumer cash inventory behavior by developing a dynamic model of forward-looking consumers and estimating structural parameters of the model using detailed consumer survey data. Consumers facing holding and withdrawal costs solve a discrete-time continuous-control dynamic programming problem to optimally use cash at the point of sale. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): D, D1, D12, D14, E, E4, E41, E42, G, G2, G21
Monetary Policy Transmission with Endogenous Central Bank Responses in TANK Staff Working Paper 2025-21 Lilia Maliar, Chris Naubert We study how the transmission of monetary policy innovations is affected by the endogenous response of the central bank to macroeconomic aggregates in a two-agent New Keynesian model. We focus on how the stance of monetary policy and the fraction of savers in the economy affect transmission. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Interest rates, Monetary policy, Monetary policy transmission JEL Code(s): C, C6, C61, C62, C63, E, E3, E31, E5, E52
2024 Methods-of-Payment Survey Report: Cash in an Era of Alternatives Staff Discussion Paper 2025-12 Marie-Hélène Felt, Anna Chernesky, Angelika Welte We present core findings from the 2024 Methods-of-Payment Survey, highlighting results from both the survey questionnaire and three-day shopping diary. Although cash holdings have increased in nominal terms, we find that cash usage remains unchanged since 2020. Mobile and other alternative payment methods continue to grow in importance. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): D, D8, D83, E, E4, E41
Firm Heterogeneity and Adverse Selection in External Finance: Micro Evidence and Macro Implications Staff Working Paper 2025-20 Xing Guo, Pablo Ottonello, Thomas Winberry, Toni Whited We develop a heterogeneous firm macro model with private information and quantify the aggregate relevance of asymmetric information. We find that a spike in private information account for 40% of the decline in aggregate investment during the 2007-2009 financial crisis and made monetary stimulus significantly less effective. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Financial markets, Firm dynamics, Monetary policy JEL Code(s): D, D8, D82, E, E2, E22, E3, E32, E5, E52, G, G3, G30
Synthesizing Signals from the Canadian Survey of Consumer Expectations Staff Discussion Paper 2025-11 Jacob Dolinar, Patrick Sabourin, Matt West We introduce the Canadian Survey of Consumer Expectations indicator. This indicator provides a summary measure of consumer opinions that we can track over time. We construct three underlying sub-indexes—financial health, labour market and consumer spending—that capture different factors influencing consumers’ daily lives. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Central bank research JEL Code(s): D, D1, D12, D8, D84, E, E2, E21, E3, E32, E7, E71
The impact of trading flows on Government of Canada bond prices Staff Analytical Note 2025-20 Andreas Uthemann, Rishi Vala, Jun Yang Trading flows affect Government of Canada bond prices. Our estimates suggest a sale of 1% of the available supply of bonds typically lowers bond prices by 0.2%. From 2000 to 2025, demand from institutional investors, such as Canadian pension funds and foreign investors, explains 69% of quarterly price variation, with the remainder explained by changes in the supply of bonds. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Asset pricing, Debt management, Econometric and statistical methods, Financial institutions, Financial markets, Financial stability, Market structure and pricing, Sectoral balance sheet JEL Code(s): C, C0, C01, C3, C36, C5, C58, D, D5, D53, E, E6, E62, G, G1, G11, G12, G2, G23
On the Programmability and Uniformity of Digital Currencies Staff Working Paper 2025-18 Jonathan Chiu, Cyril Monnet Central bankers argue that programmable digital currencies may compromise the uniformity of money. We develop a stylized model to examine this argument and the trade-offs involved in circulating programmable money. Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Payment clearing and settlement systems JEL Code(s): E, E5, E50, E58
Assessing tariff pass-through to consumer prices in Canada: Lessons from 2018 Staff Analytical Note 2025-18 Alexander Lam US trade protectionism is making the economic outlook increasingly uncertain. To assess how consumer prices may respond to tariffs, we examine a tariff episode from 2018 using detailed microdata and the synthetic control method. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Inflation and prices, International topics, Recent economic and financial developments, Trade integration JEL Code(s): E, E3, E30, E31, F, F1, F10, F13, F14
Benchmarks for assessing labour market health: 2025 update Staff Analytical Note 2025-17 Fares Bounajm, Tessa Devakos We provide an update on the state of the labour market, which has moved into modest excess supply. We also explore why wage growth measures remain elevated and how US trade policy could affect different parts of the labour market. We update the range of benchmarks in our dashboard of indicators. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Labour markets, Monetary policy JEL Code(s): E, E2, J, J2, J3, J6
A Retail CBDC Design for Basic Payments: Feasibility Study Staff Discussion Paper 2025-9 Sriram Darbha, Cyrus Minwalla, Rakesh Arora, Dinesh Shah We outline possible system architectures for an online retail central bank digital currency (CBDC) and identify one well-suited for basic payments. We analyze OpenCBDC 2PC, a representative system, finding such designs to be feasible, although some areas require further investigation. Our framing highlights other promising architectures for a retail CBDC. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Central bank research, Digital currencies and fintech JEL Code(s): E, E4, E42, E5, E51, O, O3