F4 - Macroeconomic Aspects of International Trade and Finance

• The Propagation of Regional Shocks in Housing Markets: Evidence from Oil Price Shocks in Canada

  Staff Working Paper 2018-56 Lutz Kilian, Xiaoqing Zhou

  How do global oil price shocks spread through Canada’s economy? With Canada’s regionally diverse economy in mind, we explore the implications of oil price shocks for Canadian housing markets and regional economies. We show that the belief that oil price shocks only matter in oil-rich regions is false.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Housing, International topics, Labour markets, Regional economic developments JEL Code(s): F, F4, F43, Q, Q3, Q33, Q4, Q43, R, R1, R12, R3, R31

• Responding to the First Era of Globalization: Canadian Trade Policy, 1870–1913

  Staff Working Paper 2018-42 Ian Keay, Patrick Alexander

  In this paper we document Canada’s trade policy response to late-nineteenth- and earlytwentieth-century globalization. We link newly digitized annual product-specific data on the value of Canadian imports and duties paid from 1870–1913 to establishment-specific production and location information drawn from the manuscripts of the 1871 industrial census.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, International topics, Trade integration JEL Code(s): F, F1, F13, F14, F4, F42, F6, F60, N, N7, N71

• Decomposing Canada’s Market Shares: An Update

  Staff Analytical Note 2018-26 Nicholas Labelle

  Building on the shift-share analysis of Barnett and Charbonneau (2015), this note decomposes Canada’s market shares in the United States, Europe and China for imports of non-energy goods into competitiveness, preference shifts and an interaction term. We find that, despite the depreciation of the dollar, Canada continued to lose market share over 2014–17 (around 0.4 percentage points lost per year on average over four years).

  Content Type(s): Staff research, Staff analytical notes Topic(s): International topics JEL Code(s): F, F1, F10, F14, F4

• The Extensive Margin of Trade and Monetary Policy

  Staff Working Paper 2018-37 Yuko Imura, Malik Shukayev

  This paper studies the effects of monetary policy shocks on firms’ participation in exporting. We develop a two-country dynamic stochastic general equilibrium model in which heterogeneous firms make forward-looking decisions on whether to participate in the export market and prices are staggered across firms and time.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Firm dynamics, International topics, Monetary policy JEL Code(s): E, E5, E52, F, F1, F12, F4, F44

• Sources of Borrowing and Fiscal Multipliers

  Staff Working Paper 2018-32 Romanos Priftis, Srecko Zimic

  This paper finds that debt-financed government spending multipliers vary considerably depending on the location of the debt buyer. In a sample of 33 countries, we find that government spending multipliers are larger when government purchases are financed by issuing debt to foreign investors (non-residents), compared with when government purchases are financed by issuing debt to home investors (residents).

  Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Economic models, Fiscal policy, International financial markets JEL Code(s): E, E2, E6, E62, F, F4, F41, H, H3

• The Neutral Rate in Canada: 2018 Estimates

  Staff Analytical Note 2018-22 Xin Scott Chen, José Dorich

  The neutral nominal policy rate serves as a benchmark for assessing the degree of monetary stimulus and provides a medium- to long-run anchor for the policy rate. Since quantitative measures of the neutral rate are subject to considerable uncertainty, Bank staff rely on four different approaches to estimate the Canadian neutral rate.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41

• The Macroeconomic Effects of Quantitative Easing in the Euro Area: Evidence from an Estimated DSGE Model

  Staff Working Paper 2018-11 Stefan Hohberger, Romanos Priftis, Lukas Vogel

  This paper estimates an open-economy dynamic stochastic general equilibrium model with Bayesian techniques to analyse the macroeconomic effects of the European Central Bank’s (ECB’s) quantitative easing (QE) programme. Using data on government debt stocks and yields across maturities, we identify the parameter governing portfolio adjustment in the private sector.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Interest rates, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E52, F, F4, F41

• Modeling Fluctuations in the Global Demand for Commodities

  Staff Working Paper 2018-4 Lutz Kilian, Xiaoqing Zhou

  It is widely understood that the real price of globally traded commodities is determined by the forces of demand and supply. One of the main determinants of the real price of commodities is shifts in the demand for commodities associated with unexpected fluctuations in global real economic activity.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, International topics JEL Code(s): F, F4, F44, Q, Q1, Q11, Q3, Q31, Q4, Q41, Q43

• Capital-Goods Imports and US Growth

  Staff Working Paper 2018-1 Michele Cavallo, Anthony Landry

  Capital-goods imports have become an increasing source of growth for the U.S. economy. To understand this phenomenon, we build a neoclassical growth model with international trade in capital goods in which agents face exogenous paths of total factor and investment-specific productivity measures.

  Content Type(s): Staff research, Staff working papers Topic(s): Productivity, Trade integration JEL Code(s): E, E2, F, F2, F4, O, O3, O4