The Distributional Effects of Conventional Monetary Policy and Quantitative Easing: Evidence from an Estimated DSGE Model Staff working paper 2019-6 Stefan Hohberger, Romanos Priftis, Lukas Vogel This paper compares the distributional effects of conventional monetary policy and quantitative easing (QE) within an estimated open-economy DSGE model of the euro area. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, E5, E52, F, F4, F41 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
January 21, 2019 CARR Meeting (January 21, 2019) Content Type(s): Meetings Source(s): Canadian Alternative Reference Rate Working Group
Corporate Debt Composition and Business Cycles Staff working paper 2019-5 Jelena Zivanovic Based on empirical evidence, I propose a dynamic stochastic general equilibrium model with two financial sectors to analyze the role of corporate debt composition (bank versus bond financing) in the transmission of economic shocks. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E4, E44 Research Theme(s): Financial system, Household and business credit, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
Price Caps in Canadian Bond Borrowing Markets Staff analytical note 2019-2 Léanne Berger-Soucy, Jean-Sébastien Fontaine, Adrian Walton Price controls, or caps, can lead to shortages, as 1970’s gasoline price controls illustrate. One million trades show that the market for borrowing bonds in Canada has an implicit price cap: traders are willing to pay no more than the overnight interest rate to borrow a bond. This suggests the probability of a shortage increases when interest rates are very low. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G1, G10, G12 Research Theme(s): Financial markets and funds management, Market functioning, Market structure
Frictional Capital Reallocation I: Ex Ante Heterogeneity Staff working paper 2019-4 Randall Wright, Sylvia Xiaolin Xiao, Yu Zhu This paper studies dynamic general equilibrium models where firms trade capital in frictional markets. Gains from trade arise due to ex ante heterogeneity: some firms are better at investment, so they build capital in the primary market; others acquire it in the secondary market. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E22, E4, E44 Research Theme(s): Financial system, Financial institutions and intermediation, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting
Can Capital Deepening Explain the Global Decline in Labor’s Share? Staff working paper 2019-3 Andrew Glover, Jacob Short We estimate an aggregate elasticity of substitution between capital and labor near or below one, which implies that capital deepening cannot explain the global decline in labor's share. Our methodology derives from transition paths in the neo-classical growth model. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E13, E2, E22, E25, J, J3 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply