International topics

• The Propagation of Regional Shocks in Housing Markets: Evidence from Oil Price Shocks in Canada

  Staff Working Paper 2018-56 Lutz Kilian, Xiaoqing Zhou

  How do global oil price shocks spread through Canada’s economy? With Canada’s regionally diverse economy in mind, we explore the implications of oil price shocks for Canadian housing markets and regional economies. We show that the belief that oil price shocks only matter in oil-rich regions is false.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Housing, International topics, Labour markets, Regional economic developments JEL Code(s): F, F4, F43, Q, Q3, Q33, Q4, Q43, R, R1, R12, R3, R31

• Non-Performing Loans, Fiscal Costs and Credit Expansion in China

  Staff Working Paper 2018-53 Huixin Bi, Yongquan Cao, Wei Dong

  This paper studies how the credit expansion policy pursued by the Chinese government in an effort to stimulate its economy in the post-crisis period affects bank–firm loan contracts and the macroeconomy. We build a structural model with financial frictions in which the optimal loan contract reflects the trade-off between leverage and the probability of default.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Fiscal policy, International topics JEL Code(s): E, E4, E44, E6, E62