E - Macroeconomics and Monetary Economics

• The Paul Storer Memorial Lecture—Cross-Border Trade Integration and Monetary Policy

  Staff Discussion Paper 2016-20 Stephen S. Poloz

  In this paper we explore the nexus between cross-border trade integration and monetary policy. We first review the evidence that trade liberalization has increased the degree of integration in North America and conclude that, while robust structural inferences remain elusive, there is sufficient supporting evidence for central banks to treat the issue seriously.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Monetary policy, Trade integration JEL Code(s): E, E3, E37, E5, F, F1, F4, F41, F6

• On What States Do Prices Depend? Answers from Ecuador

  Staff Working Paper 2016-43 Craig Benedict, Mario J. Crucini, Anthony Landry

  In this paper, we argue that differences in the cost structures across sectors play an important role in firms’ decisions to adjust their prices. We develop a menu-cost model of pricing in which retail firms intermediate trade between producers and consumers.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Monetary policy transmission JEL Code(s): E, E3, E5, F, F3, F33

• A Primer on Neo-Fisherian Economics

  Staff Analytical Note 2016-14 Robert Amano, Thomas J. Carter, Rhys R. Mendes

  Conventional models imply that central banks aiming to raise inflation should lower nominal rates and thus stimulate aggregate demand. However, several economists have recently challenged this conventional wisdom in favour of an alternative “neo-Fisherian’’ view under which higher nominal rates might in fact lead to higher inflation.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Economic models, Inflation and prices, Interest rates, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E4, E5

• The Global Benefits of Low Oil Prices: More Than Meets the Eye

  Staff Analytical Note 2016-13 Robert Fay, Justin-Damien Guénette, Louis Morel

  Between mid-2014 and early 2016, oil prices fell by roughly 65 per cent. This note documents the channels through which this oil price decline is expected to affect the global economy. One important and immediate channel is through higher expenditures, especially in net oil-importing countries.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, International topics, Recent economic and financial developments JEL Code(s): E, E3, E32, E37, F, F0, F01, Q, Q4, Q43

• Implementing Cross-Border Interbank Lending in BoC-GEM-FIN

  Staff Discussion Paper 2016-19 Malik Shukayev, Argyn Toktamyssov

  BIS interbank lending data show that the Great Recession generated large and persistent changes in the international interbank lending positions of various countries. The main objective of this study is to understand the role of changes in international interbank credit flows in transmitting shocks across borders.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Economic models, International topics JEL Code(s): E, E2, E27, E3, E37, F, F4, F47