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423 Results

What Can Earnings Calls Tell Us About the Output Gap and Inflation in Canada?

Staff Discussion Paper 2023-13 Marc-André Gosselin, Temel Taskin
We construct new indicators of demand and supply for the Canadian economy by using natural language processing techniques to analyze earnings calls of publicly listed firms. Our results indicate that the new indicators could help central banks identify inflationary pressures in real time.

Why Consumers Disagree About Future Inflation

Staff Discussion Paper 2023-11 Naveen Rai, Patrick Sabourin
Since 2022, consumer inflation expectations have shifted, with a significant increase in those expecting high inflation in the coming year and a surge in those expecting deflation further in the future. Using data from the Canadian Survey of Consumer Expectations, this paper seeks to assess the factors that influence people to expect high inflation, moderate inflation or deflation.
Content Type(s): Staff research, Staff discussion papers Topic(s): Inflation and prices JEL Code(s): C, C8, C83, D, D8, D84, E, E3, E31

Markups and inflation during the COVID-19 pandemic

Staff Analytical Note 2023-8 Olga Bilyk, Timothy Grieder, Mikael Khan
We find that prices and costs for consumer-oriented firms moved roughly one-for-one during the COVID-19 pandemic. This means firms fully passed rising costs through to the prices they charged. However, our results are suggestive, given data limitations and the uncertainty associated with estimating markups.
Content Type(s): Staff research, Staff analytical notes Topic(s): Firm dynamics, Inflation and prices JEL Code(s): D, D2, D4, E, E2, E3, L, L1

The Macroeconomic Effects of Portfolio Equity Inflows

Staff Working Paper 2023-31 Nick Sander
I provide evidence that portfolio equity inflows can have expansionary effects on GDP and inflation if not offset by monetary policy. I use a shift-share instrument to estimate equity inflows based on plausibly exogenous timing of inflows into mutual funds with heterogeneous country portfolios.

Understanding Inflation Dynamics: The Role of Government Expenditures

Staff Working Paper 2023-30 Chang Liu, Yinxi Xie
We study the impact government expenditure has on inflation. We find that changes in government expenditure account for a substantial portion of inflation variations. We also find that inflation and inflation expectations respond negatively to fiscal spending shocks, reaffirming the supply-side channel through which inflation responds to fiscal expansions.

Time Use and Macroeconomic Uncertainty

Staff Working Paper 2023-29 Matteo Cacciatore, Stefano Gnocchi, Daniela Hauser
We estimate the effects of economic uncertainty on time use and discuss its macroeconomic implications. We develop a model to demonstrate that substitution between market and non-market work provides an additional insurance margin to households, weakening precautionary savings and labour supply and lowering aggregate demand, ultimately amplifying the contractionary effects of uncertainty.

Potential output and the neutral rate in Canada: 2023 assessment

We expect that potential output growth will rebound from 1.4% in 2022 to 2.2% on average between 2023 and 2026. We revised down our estimates of growth over 2022–25 relative to the April 2022 assessment. The Canadian nominal neutral rate remains unchanged—in the range of 2% to 3%.

Narrative-Driven Fluctuations in Sentiment: Evidence Linking Traditional and Social Media

Staff Working Paper 2023-23 Alistair Macaulay, Wenting Song
News media present competing interpretations of what breaking news implies for the macroeconomy. Recent examples include news reporting on high inflation and yield curve inversions. Do these narratives shape macroeconomic sentiment? In this paper, we highlight the importance of narratives using evidence linking traditional media and social media.

The Impact of Unemployment Insurance and Unsecured Credit on Business Cycles

Staff Working Paper 2023-22 Michael Irwin
This paper studies how unsecured consumer credit impacts the extent to which unemployment insurance (UI) policies smooth aggregate consumption fluctuations over the business cycle. Using a general equilibrium real business cycle model, I find that unsecured credit amplifies the extent to which UI smooths cyclical consumption fluctuations.

Turning Words into Numbers: Measuring News Media Coverage of Shortages

Staff Discussion Paper 2023-8 Lin Chen, Stephanie Houle
We develop high-frequency, news-based indicators using natural language processing methods to analyze news media texts. Our indicators track both supply (raw, intermediate and final goods) and labour shortages over time. They also provide weekly time-varying topic narratives about various types of shortages.
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