E - Macroeconomics and Monetary Economics

• The Business Leaders’ Pulse—An Online Business Survey

  Staff Discussion Paper 2022-14 Tony Chernis, Chris D'Souza, Kevin MacLean, Tasha Reader, Joshua Slive, Farrukh Suvankulov

  This paper introduces the Business Leaders’ Pulse, a new online survey conducted each month. It is designed to provide timely and flexible input into the Bank of Canada’s monetary policy decision making by asking firms about their sales and employment growth expectations, the risks to their business outlook, and topical questions that address specific information needs of the Bank.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Monetary policy and uncertainty, Recent economic and financial developments JEL Code(s): C, C8, C83, D, D2, D22, E, E3, E32

• International Transmission of Quantitative Easing Policies: Evidence from Canada

  Staff Working Paper 2022-30 Serdar Kabaca, Kerem Tuzcuoglu

  This paper examines the cross-border spillovers from major economies’ quantitative easing (QE) policies to their trading partners. We concentrate on spillovers from the US to Canada during the zero lower bound period when QE policies were actively used.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, International topics, Monetary policy transmission JEL Code(s): E, E5, E52, F, F4, F41, F44

• Quantum Monte Carlo for Economics: Stress Testing and Macroeconomic Deep Learning

  Staff Working Paper 2022-29 Vladimir Skavysh, Sofia Priazhkina, Diego Guala, Thomas Bromley

  Using the quantum Monte Carlo algorithm, we study whether quantum computing can improve the run time of economic applications and challenges in doing so. We apply the algorithm to two models: a stress testing bank model and a DSGE model solved with deep learning. We also present innovations in the algorithm and benchmark it to classical Monte Carlo.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Central bank research, Econometric and statistical methods, Economic models, Financial stability JEL Code(s): C, C1, C15, C6, C61, C63, C68, C7, E, E1, E13, G, G1, G17, G2, G21

• Unregulated Lending, Mortgage Regulations and Monetary Policy

  Staff Working Paper 2022-28 Ugochi Emenogu, Brian Peterson

  This paper evaluates the effectiveness of macroprudential policies when regulations are uneven across mortgage lender types. We look at credit tightening that results from macroprudential regulations and examine how much of it is counteracted by credit shifting to unregulated lenders. We also study the impact of monetary policy tightening when some lenders are unregulated.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Financial system regulation and policies, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E50, E52, E58, G, G2, G21, G23, G28

• Endogenous Liquidity and Capital Reallocation

  Staff Working Paper 2022-27 Wei Cui, Randall Wright, Yu Zhu

  We study economies where firms acquire capital in primary markets then retrade it in secondary markets after information on idiosyncratic productivity arrives. Our secondary markets incorporate bilateral trade with search, bargaining and liquidity frictions.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary policy JEL Code(s): E, E2, E22, E4, E44

• Cash in the Pocket, Cash in the Cloud: Cash Holdings of Bitcoin Owners

  Staff Working Paper 2022-26 Daniela Balutel, Christopher Henry, Kim Huynh, Marcel Voia

  We estimate the effect that owning Bitcoin has on the amount of cash held by Canadian consumers. Our results question the view that adopting certain new technologies, such as Bitcoin, leads to a decline in cash holdings.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C1, C12, E, E4, O, O3, O33, O5, O51

• Settlement Balances Deconstructed

  Staff Discussion Paper 2022-13 Parnell Chu, Grahame Johnson, Scott Kinnear, Karen McGuinness, Matthew McNeely

  Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Coronavirus disease (COVID-19), Financial markets, Monetary policy implementation JEL Code(s): E, E5, E58, E59, E6, G, G0, G01