Financial markets

• Central Bank Communication or the Media’s Interpretation: What Moves Markets?

  Staff Working Paper 2012-9 Scott Hendry

  The goal of this paper is to investigate what type of information from Bank of Canada communication statements or the market commentary based on these statements has a significant effect on the volatility or level of returns in a short-term interest rate market.

  Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Financial markets JEL Code(s): E, E5, E58, G, G1, G14

• Macroprudential Rules and Monetary Policy when Financial Frictions Matter

  Staff Working Paper 2012-6 Jeannine Bailliu, Césaire Meh, Yahong Zhang

  This paper examines the interaction between monetary policy and macroprudential policy and whether policy makers should respond to financial imbalances. To address this issue, we build a dynamic general equilibrium model that features financial market frictions and financial shocks as well as standard macroeconomic shocks.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial markets, Financial stability, Monetary policy framework JEL Code(s): E, E4, E42, E5, E50, E6, E60