E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

• How changes in the share of constrained households affect the effectiveness of monetary policy

  Staff Analytical Note 2024-3 Felipe Alves, Sushant Acharya

  We measure how the change in the share of constrained households in Canada following the COVID-19 recession has impacted the effectiveness of monetary policy.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Coronavirus disease (COVID-19), Monetary policy transmission JEL Code(s): E, E2, E21, E4, E40, E5, E50

• Central Bank Digital Currency and Banking Choices

  Staff Working Paper 2024-4 Jiaqi Li, Andrew Usher, Yu Zhu

  To what extent does a central bank digital currency (CBDC) compete with bank deposits? To answer this question, we develop and estimate a structural model where each household chooses which financial institution to deposit their digital money with.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Digital currencies and fintech JEL Code(s): E, E5, E50, E58

• The Role of International Financial Integration in Monetary Policy Transmission

  Staff Working Paper 2024-3 Jing Cynthia Wu, Yinxi Xie, Ji Zhang

  We propose an open-economy New Keynesian model with financial integration that allows financial intermediaries to hold foreign long-term bonds. We study the implications of financial integration on monetary policy transmission. Among various aspects of financial integration, the bond duration plays a major role. These results hold for conventional and unconventional monetary policies.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, International financial markets, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E52, F, F3, F36, F4, F42