E32 - Business Fluctuations; Cycles

• The Anatomy of Sentiment-Driven Fluctuations

  Staff Working Paper 2021-33 Sushant Acharya, Jess Benhabib, Zhen Huo

  We show that changes in sentiment that aren’t related to fundamentals can drive persistent macroeconomic fluctuations even when all economic agents are rational. Changes in sentiment can also affect how fundamental shocks affect macroeconomic outcomes.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): E, E2, E20, E3, E32, F, F4, F44

• Small and smaller: How the economic outlook of small firms relates to size

  Staff Analytical Note 2021-14 Chris D'Souza, James Fudurich, Farrukh Suvankulov

  Firms with fewer than 100 workers employ about 65 percent of the total labour force in Canada. An online survey experiment was conducted with firms of this size in Canada in 2018–19. We compare the responses of small and micro firms to explore how their characteristics and economic outlooks relate to their size.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, Firm dynamics JEL Code(s): C, C8, C83, D, D2, D22, E, E3, E32