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233 Results

Firm Inattention and the Efficacy of Monetary Policy: A Text-Based Approach

Staff Working Paper 2022-3 Wenting Song, Samuel Stern
How much attention do firms pay to macroeconomic news? Through a novel text-based measure, two facts emerge. First, attention is polarized. Most firms either never or always pay attention to economic conditions. Second, it is countercyclical. During recessions, more firms pay attention, and firms pay greater attention to macroeconomic news.

Evaluating the Effects of Forward Guidance and Large-scale Asset Purchases

Staff Working Paper 2021-54 Xu Zhang
I propose a novel method to identify and estimate the macroeconomic effects of forward guidance and large-scale asset purchases (LSAP) for each FOMC announcement. I find that LSAP is more important than forward guidance in influencing output and inflation. LSAP puts upward pressure on short-term yields, so it should always be used in conjunction with forward guidance.

Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight

Staff Working Paper 2021-51 Michael Woodford, Yinxi Xie
How do outcomes of monetary and fiscal stabilization policies at the zero lower bound change when decision makers have finite planning horizons in the economy? We explore the effects of limited foresight on policy tools and the interaction between monetary and fiscal policy.

Assessing Labour Market Slack for Monetary Policy

Staff Discussion Paper 2021-15 Erik Ens, Laurence Savoie-Chabot, Kurt See, Shu Lin Wee
Measuring labour market slack is essential for central banks: without full employment in the economy, inflation will not stay close to target. We propose a comprehensive approach to assessing labour market slack that reflects the complexity and diversity of the labour market.

Energy Efficiency and Fluctuations in CO2 Emissions

Staff Working Paper 2021-47 Soojin Jo, Lilia Karnizova
Carbon dioxide emissions have been commonly modelled as rising and falling with total output. Yet many factors, such as energy-efficiency improvements and shifts to cleaner energy, can break this relationship. We evaluate these factors using US data and find that changes in energy efficiency of consumption goods explain a significant proportion of emissions fluctuations. This finding also implies that models that omit energy efficiency likely overestimate the trade-off between environmental protection and economic performance.

From He-Cession to She-Stimulus? The Labor Market Impact of Fiscal Policy Across Gender

Staff Working Paper 2021-42 Alica Ida Bonk, Laure Simon
The effects of fiscal policy shocks on labour market outcomes across gender depend on the type of public expenditure. Women benefit most from increases in the government wage bill, while men are the main beneficiaries of higher investment spending.

Fiscal Spillovers: The Case of US Corporate and Personal Income Taxes

Staff Working Paper 2021-41 Madeline Hanson, Daniela Hauser, Romanos Priftis
How do changes to personal and corporate income tax rates in the United States affect its trading partners? Spillover effects from cuts in the two taxes differ. They are generally small and negative for corporate taxes, but sizable and positive for personal income taxes.

Estimating Large-Dimensional Connectedness Tables: The Great Moderation Through the Lens of Sectoral Spillovers

Staff Working Paper 2021-37 Felix Brunner, Ruben Hipp
Understanding the size of sectoral links is crucial to predicting the impact of a crisis on the whole economy. We show that statistical learning techniques substantially outperform traditional estimation techniques when measuring large networks of these links.

The Anatomy of Sentiment-Driven Fluctuations

Staff Working Paper 2021-33 Sushant Acharya, Jess Benhabib, Zhen Huo
We show that changes in sentiment that aren’t related to fundamentals can drive persistent macroeconomic fluctuations even when all economic agents are rational. Changes in sentiment can also affect how fundamental shocks affect macroeconomic outcomes.

Small and smaller: How the economic outlook of small firms relates to size

Staff Analytical Note 2021-14 Chris D'Souza, James Fudurich, Farrukh Suvankulov
Firms with fewer than 100 workers employ about 65 percent of the total labour force in Canada. An online survey experiment was conducted with firms of this size in Canada in 2018–19. We compare the responses of small and micro firms to explore how their characteristics and economic outlooks relate to their size.
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