Staff research

• 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

• How Do Agents Form Macroeconomic Expectations? Evidence from Inflation Uncertainty

  Staff Working Paper 2024-5 Tao Wang

  The uncertainty regarding inflation that is observed in density forecasts of households and professionals helps macroeconomists understand the formation mechanism of inflation expectations. Shocks to inflation take time to be perceived by all agents in the economy, and such rigidity is lower in a high-inflation environment.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Inflation and prices, Monetary policy and uncertainty JEL Code(s): D, D8, D84, E, E3, E31, E7, E71

• 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

• The Role of Long-Term Contracting in Business Lending

  Staff Working Paper 2024-2 Phoebe Tian

  This paper examines inefficiencies arising from a lack of long-term contracting in small business lending in China.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions JEL Code(s): D, D8, D83, D86, G, G2, G21, L, L1, L14, L2, L26