Recent economic and financial developments

• March 22, 2018 Financial Stability: Taking Care of Unfinished Business

  Remarks Carolyn A. Wilkins Rotman School of Management conference “Are We Ready For the Next Financial Crisis?” Toronto, Ontario

  Senior Deputy Governor Carolyn A. Wilkins discusses three areas in which work remains to be done to improve financial stability.

  Content Type(s): Press, Speeches Topic(s): Credit and credit aggregates, Digital Currencies, Financial stability, Financial system regulation and policies, Monetary policy framework, Recent economic and financial developments

• Did U.S. Consumers Respond to the 2014–2015 Oil Price Shock? Evidence from the Consumer Expenditure Survey

  Staff Working Paper 2018-13 Patrick Alexander, Louis Poirier

  The impact of oil price shocks on the U.S. economy is a topic of considerable debate. In this paper, we examine the response of U.S. consumers to the 2014–2015 negative oil price shock using representative survey data from the Consumer Expenditure Survey.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Business fluctuations and cycles, Domestic demand and components, Recent economic and financial developments JEL Code(s): D, D1, D12, E, E2, E21, Q, Q4, Q43

• Asymmetric Risks to the Economic Outlook Arising from Financial System Vulnerabilities

  Staff Analytical Note 2018-6 Thibaut Duprey

  When financial system vulnerabilities are elevated, they can give rise to asymmetric risks to the economic outlook. To illustrate this, I consider the economic outlook presented in the Bank of Canada’s October 2017 Monetary Policy Report in the context of two key financial system vulnerabilities: high levels of household indebtedness and housing market imbalances.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Financial stability, Financial system regulation and policies, Monetary and financial indicators, Recent economic and financial developments, Uncertainty and monetary policy JEL Code(s): C, C0, C01, C1, C11, C15, E, E1, E17, E3, E32, E37, E4, E44, E47, E5, E58, E6, E66, G, G0, G01, G1, G18

• Blockchain Revolution Without the Blockchain

  Staff Analytical Note 2018-5 Hanna Halaburda

  The technology behind blockchain has attracted a lot of attention. However, this technology is for the most part not well understood. There is no consensus on what benefits it may bring or on how it may fail.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Digital Currencies, Recent economic and financial developments, Service Sector JEL Code(s): D, D8, G, G2, O, O3, O33

• February 8, 2018 At the Crossroads: Innovation and Inclusive Growth

  Remarks Carolyn A. Wilkins G7 Symposium on Innovation and Inclusive Growth Montebello, Quebec

  Senior Deputy Governor Carolyn A. Wilkins discusses technological progress and how policy-makers can harness it for economic growth that benefits everyone.

  Content Type(s): Press, Speeches Topic(s): Central bank research, International topics, Labour markets, Market structure and pricing, Productivity, Recent economic and financial developments

• Wages: Measurement and Key Drivers

  Staff Analytical Note 2018-2 Dany Brouillette, Jonathan Lachaine, Benoit Vincent

  Available sources of hourly wage data in Canada sometimes send conflicting signals about wage growth. This note thus has two objectives: first, we develop a wage measure—the wage-common—to better capture the (underlying) wage pressures reflecting the common trend across the available data sources. Second, we re-examine the relationship between wage growth and macro drivers (labour market slack and labour productivity).

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Econometric and statistical methods, Labour markets, Recent economic and financial developments JEL Code(s): C, C3, C38, J, J3

• The Impacts of Minimum Wage Increases on the Canadian Economy

  Staff Analytical Note 2017-26 Dany Brouillette, Calista Cheung, Daniel Gao, Olivier Gervais

  This note reviews the channels through which scheduled minimum wage increases over the coming years may affect Canadian economic activity and inflation and assesses their macroeconomic impacts. From reduced-form estimates of direct minimum wage pass-through, we find that consumer price index (CPI) inflation could be boosted by about 0.1 percentage point (pp) on average in 2018.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Labour markets, Recent economic and financial developments JEL Code(s): E, E2, E24, J, J2, J21, J22, J23

• Recent Evolution of Canada’s Credit-to-GDP Gap: Measurement and Interpretation

  Staff Analytical Note 2017-25 Thibaut Duprey, Timothy Grieder, Dylan Hogg

  Over the past several years, the Bank for International Settlements has noted that Canada’s credit-to-GDP gap has widened and is above thresholds indicating future banking stress.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Financial stability, Monetary and financial indicators, Recent economic and financial developments, Sectoral balance sheet JEL Code(s): D, D1, E, E3, E32, G, G0, G01, G1, G2, G21, G3, G30

• November 28, 2017 Analysis of Household Vulnerabilities Using Loan-Level Mortgage Data

  Financial System Review - November 2017 Olga Bilyk, Alexander Ueberfeldt, Yang Xu

  This report examines detailed data on home mortgages to provide a better understanding of the vulnerabilities associated with the mortgage market. The proportion of low-ratio mortgages is growing, particularly in regions with strong house price growth. Moreover, these borrowers exhibit less flexibility to adverse shocks, since they have high debt levels relative to income and have taken mortgages with long amortization periods.

  Content Type(s): Publications, Financial System Review Article Topic(s): Credit and credit aggregates, Recent economic and financial developments, Sectoral balance sheet JEL Code(s): D, D1, D12, D14, G, G2, G21, G28

• November 16, 2017 Factors Behind the 2014 Oil Price Decline

  Bank of Canada Review - Autumn 2017 Reinhard Ellwanger, Benjamin Sawatzky, Konrad Zmitrowicz

  Oil prices have declined sharply over the past three years. While both supply and demand factors played a role in the large oil price decline of 2014, global supply growth seems to have been the predominant force. The most important drivers were likely the surprising growth of US shale oil production, the output decisions of the Organization of the Petro-leum Exporting Countries and the weaker-than-expected global growth that followed the 2009 global financial crisis.

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Business fluctuations and cycles, International topics, Recent economic and financial developments JEL Code(s): Q, Q4, Q41, Q43