Staff working papers

• Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital Currency

  Staff Working Paper 2020-7 Kim Huynh, Jozsef Molnar, Oleksandr Shcherbakov, Qinghui Yu

  Using a two-stage model, we study the determinants of Canadian consumers’ choices of payment method at the point of sale. We estimate consumer preferences and adoption costs for various combinations of payment methods. We analyze how introducing a central bank digital currency would affect the market equilibrium.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): C, C5, C51, E, E4, E42, L, L1, L14, L5, L52

• A Portfolio-Balance Model of Inflation and Yield Curve Determination

  Staff Working Paper 2020-6 Antonio Diez de los Rios

  How does the supply of nominal government debt affect the macroeconomy? To answer this question, we propose a portfolio-balance model of the yield curve in which inflation is determined through an interest rate rule.

  Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Debt management, Inflation and prices, Interest rates, Monetary policy JEL Code(s): E, E4, E43, E5, E52, G, G1, G12, H, H6, H63

• Identifying Consumer-Welfare Changes when Online Search Platforms Change Their List of Search Results

  Staff Working Paper 2020-5 Ryan Martin

  Online shopping is often guided by search platforms. Consumers type keywords into query boxes, and search platforms deliver a list of products. Consumers' attention is limited, and exhaustive searches are often impractical.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Market structure and pricing JEL Code(s): C, C1, C14, D, D1, D11, D12, D6, D8, D83, L, L4, L40

• A Spatial Model of Bank Branches in Canada

  Staff Working Paper 2020-4 Heng Chen, Matthew Strathearn

  Using data on bank branch locations across Canada from 2008 to 2018, we explore an interesting aspect of bank branch competition—geographic concentration. We find that bank branch density does not correlate with geographic and market concentration; however, we do find strong correlation with postal-code demographics.

  Content Type(s): Staff research, Staff working papers Topic(s): Firm dynamics, Market structure and pricing JEL Code(s): L, L1, R, R3

• Managing GDP Tail Risk

  Staff Working Paper 2020-3 Thibaut Duprey, Alexander Ueberfeldt

  Models for macroeconomic forecasts do not usually take into account the risk of a crisis—that is, a sudden large decline in gross domestic product (GDP). However, policy-makers worry about such GDP tail risk because of its large social and economic costs.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Economic models, Financial stability, Financial system regulation and policies, Interest rates, Monetary policy, Monetary policy framework JEL Code(s): D, D8, E, E4, E44, E5, E52, E58, G, G0, G01

• Social Learning and Monetary Policy at the Effective Lower Bound

  Staff Working Paper 2020-2 Jasmina Arifovic, Alex Grimaud, Isabelle Salle, Gauthier Vermandel

  This research develops a model in which the economy is directly influenced by how pessimistic or optimistic economic agents are about the future. The agents may hold different views and update them as new economic data become available.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Central bank research, Credibility, Economic models, Monetary policy, Monetary policy communications JEL Code(s): C, C8, C82, E, E3, E32, E5, E52

• Contagion in Dealer Networks

  Staff Working Paper 2020-1 Jean-Sébastien Fontaine, Adrian Walton

  Dealers connect investors who want to buy or sell securities in financial markets. Over time, dealers and investors form trading networks to save time and resources. An emerging field of research investigates how networks form.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Market structure and pricing, Payment clearing and settlement systems JEL Code(s): E, E4, G, G1, G2, G21, L, L1, L14