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68 Results

CBDC and Monetary Policy

Staff Analytical Note 2020-4 Mohammad Davoodalhosseini, Francisco Rivadeneyra, Yu Zhu
Improving the conduct of monetary policy is unlikely to be the main motivation for central banks to issue a central bank digital currency (CBDC). While some argue that a CBDC could allow more complex transfer schemes or the ability to break below the zero lower bound, we find these benefits might be small or difficult to realize in practice.

The Power of Helicopter Money Revisited: A New Keynesian Perspective

Staff Discussion Paper 2020-1 Thomas J. Carter, Rhys R. Mendes
We analyze money financing of fiscal transfers (helicopter money) in two simple New Keynesian models: a “textbook” model in which all money is non-interest-bearing (e.g., all money is currency), and a more realistic model with interest-bearing reserves.

A Tale of Two Countries: Cash Demand in Canada and Sweden

Staff Discussion Paper 2019-7 Walter Engert, Ben Fung, Björn Segendorf
Cash use for payments has been steadily decreasing in many countries, including Canada and Sweden. This might suggest an evolution toward a cashless society. But in Canada, cash in circulation relative to GDP has been stable for decades and has even increased in recent years. By contrast, the cash-to-GDP ratio in Sweden has been falling steadily. What has caused this difference? Are there lessons to be learned from comparing the Canadian and Swedish experiences?

Crypto ‘Money’: Perspective of a Couple of Canadian Central Bankers

Staff Discussion Paper 2019-1 James Chapman, Carolyn A. Wilkins
The market for cryptoassets has exploded in size in the 10 years since bitcoin was launched. The technology underlying cryptoassets, blockchain, has also been held up as a technology that promises to transform entire industries.

Is a Cashless Society Problematic?

Staff Discussion Paper 2018-12 Walter Engert, Ben Fung, Scott Hendry
The use of bank notes in Canada for payments has declined consistently for some time, and similar trends are evident in other countries. This has led some observers to predict a cashless society in the future.

How Long Does It Take You to Pay? A Duration Study of Canadian Retail Transaction Payment Times

Staff Working Paper 2018-46 Geneviève Vallée
Using an exclusive data set of payment times for retail transactions made in Canada, I show that cash is the most time-efficient method of payment (MOP) when compared with payments by debit and credit cards. I model payment efficiency using Cox proportional hazard models, accounting for consumer choice of MOP.

The Welfare Cost of Inflation Revisited: The Role of Financial Innovation and Household Heterogeneity

We document that, across households, the money consumption ratio increases with age and decreases with consumption, and that there has been a large increase in the money consumption ratio during the recent era of very low interest rates. We construct an overlapping generations (OLG) model of money holdings for transaction purposes subject to age (older households use more money), cohort (younger generations are exposed to better transaction technology), and time effects (nominal interest rates affect money holdings).
Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation: costs and benefits JEL Code(s): E, E2, E21, E4, E41
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