Cost Pass-Through with Capacity Constraints and International Linkages Staff working paper 2023-16 Reinhard Ellwanger, Hinnerk Gnutzmann, Piotr Śpiewanowski How are regional cost shocks passed through into global prices? We investigate the role of short-run capacity constraints and show that they can induce stark non-linearities in the pass-through. We highlight this effect for the market for ammonia, a commodity produced largely from natural gas. Content Type(s): Staff research, Staff working papers JEL Code(s): L, L1, L13, L6, L65, Q, Q4, Q40, Q5, Q54 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Structural challenges, Climate change, International trade, finance and competitiveness
We Didn’t Start the Fire: Effects of a Natural Disaster on Consumers’ Financial Distress Staff working paper 2023-15 Anson T. Y. Ho, Kim Huynh, David T. Jacho-Chávez, Geneviève Vallée We use detailed consumer credit data to investigate the impact of the 2016 Fort McMurray wildfire, the costliest wildfire disaster in Canadian history, on consumers’ financial stress. We focus on the arrears of insured mortgages because of their important implications for financial institutions and insurers’ business risk and relevant management practices. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C21, D, D1, D12, G, G2, G21, Q, Q5, Q54 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Structural challenges, Climate change
Climate Variability and International Trade Staff working paper 2023-8 Geoffrey R. Dunbar, Walter Steingress, Ben Tomlin This paper quantifies the impact of hurricanes on seaborne international trade to the United States. Matching the timing of hurricane–trade route intersections with monthly U.S. port-level trade data, we isolate the unanticipated effects of a hurricane hitting a trade route using two separate identification schemes: an event study and a local projection. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C22, C5, F, F1, F14, F18, Q, Q5, Q54 Research Theme(s): Structural challenges, Climate change, International trade, finance and competitiveness
Weather the Storms? Hurricanes, Technology and Oil Production Staff working paper 2022-36 Johan Brannlund, Geoffrey R. Dunbar, Reinhard Ellwanger, Matthew Krutkiewicz Do technological improvements mitigate the potential damages from extreme weather events? We show that hurricanes lower offshore oil production in the Gulf of Mexico and that stronger storms have larger impacts. Regulations enacted in 1980 that required improved offshore construction standards only modestly mitigated the production losses. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C22, C23, Q, Q4, Q40, Q48, Q5, Q54 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Climate change
Transition Scenarios for Analyzing Climate-Related Financial Risk Staff discussion paper 2022-1 Y.-H. Henry Chen, Erik Ens, Olivier Gervais, Hossein Hosseini Jebeli, Craig Johnston, Serdar Kabaca, Miguel Molico, Sergey Paltsev, Alex Proulx, Argyn Toktamyssov Climate transition scenarios clarify climate-related risks to our economy and financial system. This paper summarizes key results of Canada-relevant scenarios developed in a pilot project on climate risk by the Bank of Canada and the Office of the Superintendent of Financial Institutions. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C6, C68, D, D5, D58, E, E5, E50, O, O4, O44, P, P1, P18, Q, Q5, Q54 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Structural challenges, Climate change
Household financial vulnerabilities and physical climate risks Staff analytical note 2021-19 Thibaut Duprey, Colin Jones, Callie Symmers, Geneviève Vallée Natural disasters occur more often than before, potentially exposing households to financial distress. We study the intersection between household financial vulnerabilities and severe weather events. Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C2, C21, C3, C38, D, D1, D14, Q, Q5, Q54 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Structural challenges, Climate change
Evolving Temperature Dynamics in Canada: Preliminary Evidence Based on 60 Years of Data Staff working paper 2021-22 Robert Amano, Marc-André Gosselin, Julien McDonald-Guimond Are summers getting hotter? Do daily temperatures change more than they used to? Using daily Canadian temperature data from 1960 to 2020 and modern econometric methods, we provide economists and policy-makers evidence on the important climate change issue of evolving temperatures. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C22, Q, Q5, Q54 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Structural challenges, Climate change