Potential output and the neutral rate in Canada: 2022 reassessment Staff Analytical Note 2022-3 Guyllaume Faucher, Christopher Hajzler, Martin Kuncl, Dmitry Matveev, Youngmin Park, Temel Taskin We expect potential output growth to be lower in 2021 than anticipated in the April 2021 assessment. By 2025, growth is expected to reach 2.3%. We assess that the Canadian nominal neutral rate increased slightly to lie in the range of 2.00% to 3.00%. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Economic models, Interest rates, Labour markets, Monetary policy, Potential output, Productivity JEL Code(s): E, E2, E3, E4, E5
Addictive Platforms Staff Working Paper 2022-16 Shota Ichihashi, Byung-Cheol Kim We study competition for consumer attention, in which platforms can sacrifice service quality for attention. A platform can choose the “addictiveness” of its service. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models JEL Code(s): D, D4, D40, L, L5, L51
March 25, 2022 A world of difference: Households, the pandemic and monetary policy Remarks (delivered virtually) Sharon Kozicki Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference San Francisco, California Bank of Canada Deputy Governor Sharon Kozicki discusses how differences among households affect economic outcomes, how shocks can have important uneven effects across households, and why these things matter for monetary policy. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Central bank research, Coronavirus disease (COVID-19), Domestic demand and components, Economic models, Housing, Inflation and prices, Labour markets, Monetary policy, Monetary policy framework, Recent economic and financial developments
March 25, 2022 Household differences and why they matter Speech summary Sharon Kozicki Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference San Francisco, California Deputy Governor Sharon Kozicki talks about why differences in income, wealth and debt across households are important for the economy and what the Bank of Canada will be watching for as interest rates rise. Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Central bank research, Coronavirus disease (COVID-19), Domestic demand and components, Economic models, Housing, Inflation and prices, Labour markets, Monetary policy, Monetary policy framework, Recent economic and financial developments
Vertical Bargaining and Obfuscation Staff Working Paper 2022-13 Edona Reshidi Is obscuring prices always bad for consumers? The answer depends on the market structure and on the negotiating power between manufacturers and retailers. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Market structure and pricing JEL Code(s): C, C7, C70, L, L1, L13, L4, L42
Household Heterogeneity and the Performance of Monetary Policy Frameworks Staff Working Paper 2022-12 Edouard Djeutem, Mario He, Abeer Reza, Yang Zhang Consumption inequality and a low interest rate environment are two important trends in today’s economy. But the implications they may have—and how those implications interact—within different monetary policy frameworks are not well understood. We study the ranking of alternative frameworks that take these trends into account. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Monetary policy and uncertainty, Monetary policy framework, Monetary policy transmission JEL Code(s): D, D3, D31, D5, D52, E, E2, E21, E3, E31, E5, E52, E58
Central Bank Liquidity Facilities and Market Making Staff Working Paper 2022-9 David Cimon, Adrian Walton We create a theoretical model of central bank asset purchases. The model helps explain how, in a crisis, these purchases ease pressures on investment dealers. Content Type(s): Staff research, Staff working papers Research Topic(s): Coronavirus disease (COVID-19), Economic models, Financial institutions, Financial markets, Market structure and pricing JEL Code(s): G, G1, G10, G2, G20, L, L1, L10
Dynamic Privacy Choices Staff Working Paper 2022-8 Shota Ichihashi Consumers often express concerns about lack of privacy, but they still give up a lot of data to digital platforms. This paper builds a dynamic game-theoretic model of data collection and privacy protection, which potentially explains consumers’ behaviour. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models JEL Code(s): D, D8, D82, D83
A Horse Race of Alternative Monetary Policy Regimes Under Bounded Rationality Staff Discussion Paper 2022-4 Joel Wagner, Tudor Schlanger, Yang Zhang We introduce bounded rationality in a canonical New Keynesian model calibrated to match Canadian macroeconomic data since Canada’s adoption of inflation targeting. We use the model to quantitatively assess the macroeconomic impact of alternative monetary policy regimes. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Central bank research, Economic models, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E2, E27, E3, E4, E5, E52, E58
Heterogeneity and Monetary Policy: A Thematic Review Staff Discussion Paper 2022-2 Felipe Alves, Christian Bustamante, Xing Guo, Katya Kartashova, Soyoung Lee, Thomas Michael Pugh, Kurt See, Yaz Terajima, Alexander Ueberfeldt The theory that rich economic diversity of businesses and households both affects and is shaped by economy-wide fluctuations has strong implications for monetary policy. This review places these insights in a Canadian context. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Economic models, Monetary policy and uncertainty, Monetary policy transmission JEL Code(s): D, D2, D25, D3, D31, E, E2, E22, E24, E5, E50, E52