Measuring household financial stress in Canada using consumer surveys Staff analytical note 2024-5 Nicolas Bédard, Patrick Sabourin We use data from the Canadian Survey of Consumer Expectations to understand how households are coping with high inflation and high interest rates. We build a subjective measure of financial stress and find that the level of stress is at a historical high but remains manageable for most households. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, D14, G, G5, H, H3 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting
Borrow Now, Pay Even Later: A Quantitative Analysis of Student Debt Payment Plans Staff working paper 2023-54 Michael Boutros, Nuno Clara, Francisco Gomes We investigate alternative student debt contracts that defer payments and ease the burden of student loans on US households by preserving disposable income early in borrowers’ lives. Our model shows substantial welfare gains from these contracts relative to existing plans and gains similar to the Biden administration's proposals but with a significantly lower cost. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, G, G5, H, H3 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Models and tools, Economic models, Monetary policy, Real economy and forecasting
What People Believe About Monetary Finance and What We Can(’t) Do About It: Evidence from a Large-Scale, Multi-Country Survey Experiment Staff working paper 2023-36 Cars Hommes, Julien Pinter, Isabelle Salle We conduct a large-scale survey to shed light on what people believe about public finance. An experiment demonstrates that central bank communication can persistently shift views on monetary financing. It further suggests that views on monetary financing impact support for fiscal discipline. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C8, C83, E, E5, E58, E6, E60, E62, E7, E70, G, G5, G53, H, H3, H31 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Real economy and forecasting
COVID-19 and Financial Stability: Practice Ahead of Theory Staff discussion paper 2022-18 Jing Yang, Hélène Desgagnés, Grzegorz Halaj, Yaz Terajima The COVID-19 pandemic uncovered policy challenges related to the economic measures that were taken to support the economy. Two years later, we attempt to identify the broader impact of these measures and research that needs to follow. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E5, E58, E6, E61, G, G2, G21, H, H3, H8, H84 Research Theme(s): Financial system, Financial stability and systemic risk, Financial system regulation and oversight, Household and business credit, Monetary policy, Real economy and forecasting
Monetary Policy, Trends in Real Interest Rates and Depressed Demand Staff working paper 2021-27 Paul Beaudry, Césaire Meh Over the last few decades, real interest rates have trended downward. The most common explanation is that this reflects depressed demand due to demographic, technological and other real factors. We explore the claim that these trends may have been amplified by certain features of monetary policy. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E4, E43, E44, E5, E52, E6, E62, E63, H, H3, H6, H63 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Real economy and forecasting
Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform Staff working paper 2021-15 Gabriela Galassi How do firms change their employment decisions when tax benefits for low-earning workers are expanded? Some firms increase employment overall, whereas others replace high-earning workers with low-earning workers, according to German linked employer-employee data. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E24, E6, E64, H, H2, H20, H24, H3, H32, I, I3, I38, J, J2, J23, J3, J38 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments Staff working paper 2020-36 Elizabeth Caucutt, Lance Lochner, Joseph Mullins, Youngmin Park Can daycare replace parents’ time spent with children? We explore this by using data on how parents spend time and money on children and how this spending is related to their child’s development. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, D13, H, H3, H31, J, J2, J22, J24 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Sources of Borrowing and Fiscal Multipliers Staff working paper 2018-32 Romanos Priftis, Srecko Zimic This paper finds that debt-financed government spending multipliers vary considerably depending on the location of the debt buyer. In a sample of 33 countries, we find that government spending multipliers are larger when government purchases are financed by issuing debt to foreign investors (non-residents), compared with when government purchases are financed by issuing debt to home investors (residents). Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E6, E62, F, F4, F41, H, H3 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness
February 23, 2012 Household Borrowing and Spending in Canada Bank of Canada Review - Winter 2011-2012 Jeannine Bailliu, Katya Kartashova, Césaire Meh Understanding how much of the increased debt load of Canadian households has been used to finance household spending on consumption and home renovation is important for the conduct of monetary policy. In this article, the authors use a comprehensive data set that provides information on the uses of debt by Canadian households. They first present some facts regarding the evolution of Canadian household debt over the period from 1999 to 2010, emphasizing the increased importance of debt flows that are secured by housing. They then explore how Canadian households have used their borrowed funds over the same period, and assess the role of these borrowed funds in financing total consumption and spending on home renovation. Finally, they examine the possible effects of a decline in house prices on consumption when housing equity is used as collateral against household indebtedness. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E2, E21, E5, E51, H, H3, H31