Business fluctuations and cycles
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A Three‐Frequency Dynamic Factor Model for Nowcasting Canadian Provincial GDP Growth
This paper estimates a three‐frequency dynamic factor model for nowcasting Canadian provincial gross domestic product (GDP). Canadian provincial GDP is released by Statistics Canada on an annual basis only, with a significant lag (11 months). -
Should Central Banks Worry About Nonlinearities of their Large-Scale Macroeconomic Models?
How wrong could policymakers be when using linearized solutions to their macroeconomic models instead of nonlinear global solutions? -
Volatility Risk and Economic Welfare
This paper examines the effects of time-varying volatility on welfare. I construct a tractable endogenous growth model with recursive preferences, stochastic volatility, and capital adjustment costs. -
May 11, 2017
Why Is Global Business Investment So Weak? Some Insights from Advanced Economies
Various drivers of business investment can be used to explain the underwhelming performance of investment in advanced economies since the global financial crisis, particularly since 2014. The slow growth in aggregate demand cannot by itself explain the full extent of the recent weakness in investment, which appears to be linked primarily to the collapse of global commodity prices and a rise in economic uncertainty. Looking ahead, business investment growth is likely to remain slower than in the pre-crisis period, largely because of structural factors such as population aging. -
Anticipated Technology Shocks: A Re‐Evaluation Using Cointegrated Technologies
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. -
Assessing the Business Outlook Survey Indicator Using Real-Time Data
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. -
March 21, 2017
Getting Down to Business: Investment and the Economic Outlook
Deputy Governor Lawrence Schembri discusses the factors affecting business investment and the implications for the economic outlook. -
February 9, 2017
Getting to the Core of Inflation
Deputy Governor Lawrence Schembri discusses the uses and measures of core inflation in the conduct of monetary policy. -
A Dynamic Factor Model for Nowcasting Canadian GDP Growth
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.