E - Macroeconomics and Monetary Economics

• Home Equity Extraction and the Boom-Bust Cycle in Consumption and Residential Investment

  Staff Working Paper 2018-6 Xiaoqing Zhou

  The consumption boom-bust cycle in the 2000s coincided with large fluctuations in the volume of home equity borrowing. Contrary to conventional wisdom, I show that homeowners largely borrowed for residential investment and not consumption.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Economic models, Housing JEL Code(s): D, D1, E, E2, E3

• What Drives Interbank Loans? Evidence from Canada

  Staff Working Paper 2018-5 Narayan Bulusu, Pierre Guérin

  We identify the drivers of unsecured and collateralized loan volumes, rates and haircuts in Canada using the Bayesian model averaging approach to deal with model uncertainty. Our results suggest that the key friction driving behaviour in this market is the collateral reallocation cost faced by borrowers.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Wholesale funding JEL Code(s): C, C5, C55, E, E4, E43, G, G2, G23

• Non-linéarité de la courbe de Phillips : un survol de la littérature

  Staff Analytical Note 2018-3 Renaud St-Cyr

  The paper reviews evidence from the economic literature on the nature of the relationship between excess capacity and inflation, better known as the Phillips curve. In particular, we examine the linearity of this relationship. This is an important issue in the current economic context in which advanced economies are approaching or exceed their potential output.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Inflation and prices, International topics JEL Code(s): E, E3, E31, E32

• How Do Central Bank Projections and Forward Guidance Influence Private-Sector Forecasts?

  Staff Working Paper 2018-2 Monica Jain, Christopher S. Sutherland

  We construct a 23-country panel data set to consider the effect of central bank projections and forward guidance on private-sector forecast disagreement. We find that central bank projections and forward guidance matter mainly for private-sector forecast disagreement surrounding upcoming policy rate decisions and matter less for private-sector macroeconomic forecasts.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Inflation targets, Monetary policy, Monetary policy communications, Monetary policy transmission JEL Code(s): D, D8, D83, E, E3, E37, E5, E52, E58

• Merchant Acceptance of Cash and Credit Cards at the Point of Sale

  Staff Analytical Note 2018-1 Ben Fung, Kim Huynh, Kerry Nield, Angelika Welte

  Recent data show that the use of credit cards in Canada has been increasing, while the use of cash has been declining. At the same time, only two-thirds of small or medium-sized businesses accept credit cards.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C2, D, D1, E, E4, E41

• Capital-Goods Imports and US Growth

  Staff Working Paper 2018-1 Michele Cavallo, Anthony Landry

  Capital-goods imports have become an increasing source of growth for the U.S. economy. To understand this phenomenon, we build a neoclassical growth model with international trade in capital goods in which agents face exogenous paths of total factor and investment-specific productivity measures.

  Content Type(s): Staff research, Staff working papers Topic(s): Productivity, Trade integration JEL Code(s): E, E2, F, F2, F4, O, O3, O4