A Canada-US Comparison of Labour Market Conditions Staff Analytical Note 2017-4 Dany Brouillette, Katerina Gribbin, Justin-Damien Guénette, James Ketcheson, Olena Kostyshyna, Jonathan Lachaine, Colin Scarffe In this note, we provide a brief comparison of the recent developments in the labour markets in Canada and the United States. Our analysis indicates that slack remains in the Canadian labour market, while the US labour market is close to full employment. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Labour markets, Recent economic and financial developments JEL Code(s): E, E2, E24, J, J2, J21, J22, J23
Assessing Global Potential Output Growth Staff Analytical Note 2017-3 Patrick Alexander, Michael Francis, Christopher Hajzler, Patrick Kirby, Louis Poirier, Sri Thanabalasingam, Kristina Hess This note estimates potential output growth for the global economy through 2019. While there is considerable uncertainty surrounding our estimates, overall we expect global potential output growth to rise modestly, from 3.1 per cent in 2016 to 3.4 per cent in 2019. Content Type(s): Staff research, Staff analytical notes Research Topic(s): International topics, Potential output, Productivity JEL Code(s): E, E1, E10, E2, E20, O, O4
Anticipated Technology Shocks: A Re‐Evaluation Using Cointegrated Technologies Staff Working Paper 2017-11 Joel Wagner Two approaches have been taken in the literature to evaluate the relative importance of news shocks as a source of business cycle volatility. The first is an empirical approach that performs a structural vector autoregression to assess the relative importance of news shocks, while the second is a structural-model-based approach. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Productivity JEL Code(s): E, E3, E32
Assessing the Business Outlook Survey Indicator Using Real-Time Data Staff Discussion Paper 2017-5 Lise Pichette, Marie-Noëlle Robitaille Every quarter, the Bank of Canada conducts quarterly consultations with businesses across Canada, referred to as the Business Outlook Survey (BOS). A principal-component analysis conducted by Pichette and Rennison (2011) led to the development of the BOS indicator, which summarizes survey results and is used by the Bank as a gauge of overall business sentiment. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Regional economic developments JEL Code(s): C, C5, C53, C8, C82, E, E3, E37
The Costs of Point-of-Sale Payments in Canada Staff Discussion Paper 2017-4 Anneke Kosse, Heng Chen, Marie-Hélène Felt, Valéry Dongmo Jiongo, Kerry Nield, Angelika Welte Using data from our 2014 cost-of-payments survey, we calculate resource costs for cash, debit cards and credit cards. For each payment method, we examine the total cost incurred by consumers, retailers, financial institutions and infrastructures, the Royal Canadian Mint and the Bank of Canada. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Digital currencies and fintech, Financial institutions, Payment clearing and settlement systems JEL Code(s): D, D1, D12, D2, D23, D24, E, E4, E41, E42, G, G2, G21, L, L2
Adoption Costs of Financial Innovation: Evidence from Italian ATM Cards Staff Working Paper 2017-8 Kim Huynh, Philipp Schmidt-Dengler, Gregor W. Smith, Angelika Welte The discrete choice to adopt a financial innovation affects a household’s exposure to inflation and transactions costs. We model this adoption decision as being subject to an unobserved cost. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes, Econometric and statistical methods, Financial services JEL Code(s): C, C3, C35, D, D1, D14, E, E4, E41
Optimal Capital Regulation Staff Working Paper 2017-6 Stéphane Moyen, Josef Schroth We study constrained-efficient bank capital regulation in a model with market-imposed equity requirements. Banks hold equity buffers to insure against sudden loss of access to funding. However, in the model, banks choose to only partially self-insure because equity is privately costly. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): E, E1, E13, E3, E32, E4, E44
Canadian Bank Notes and Dominion Notes: Lessons for Digital Currencies Staff Working Paper 2017-5 Ben Fung, Scott Hendry, Warren E. Weber This paper studies the period in Canada when both private bank notes and government-issued notes (Dominion notes) were simultaneously in circulation. Because both of these notes shared many of the characteristics of today's digital currencies, the experience with these notes can be used to draw lessons about how digital currencies might perform. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): E, E4, E41, E42, E5, E58
Price-Level Dispersion versus Inflation-Rate Dispersion: Evidence from Three Countries Staff Working Paper 2017-3 David Fielding, Christopher Hajzler, James (Jim) C. MacGee Inflation can affect both the dispersion of commodity-specific price levels across locations (relative price variability, RPV) and the dispersion of inflation rates (relative inflation variability, RIV). Some menu-cost models and models of consumer search suggest that the RIV-inflation relationship could differ from the RPV-inflation relationship. Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices JEL Code(s): E, E3, E31, E5, E50
A Dynamic Factor Model for Nowcasting Canadian GDP Growth Staff Working Paper 2017-2 Tony Chernis, Rodrigo Sekkel This paper estimates a dynamic factor model (DFM) for nowcasting Canadian gross domestic product. The model is estimated with a mix of soft and hard indicators, and it features a high share of international data. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods JEL Code(s): C, C3, C32, C38, C5, C53, E, E3, E37