Bio

Wei Dong is the director in the Monetary Policy and Financial Studies division of the Canadian Economic Analysis Department at the Bank of Canada. Her research interests are open economy macroeconomics and international finance. Wei received her PhD in economics from the University of Wisconsin, Madison.

Research Field(s): International Macroeconomics International Trade and Finance Monetary and Fiscal Policy

Staff analytical notes

Assessing the US and Canadian neutral rates: 2024 update

Staff Analytical Note 2024-9 Frida Adjalala, Felipe Alves, Hélène Desgagnés, Wei Dong, Dmitry Matveev, Laure Simon
We assess both the US and Canadian nominal neutral rates to be in the range of 2.25% to 3.25%, somewhat higher than the range of 2.0% to 3.0% in 2023. The assessed range is back to the level it was at in April 2019.
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

Digital Transformation in the Service Sector: Insights from Consultations with Firms in Wholesale, Retail and Logistics

Staff Analytical Note 2017-19 Wei Dong, James Fudurich, Lena Suchanek
Firms increasingly rely on digital technologies such as e-commerce, cloud computing, big data, digital tracking and digital platforms that are reshaping business operations, business models and market structures. In this context, the Bank of Canada consulted with firms in wholesale, retail and logistics, as well as with related industry associations to yield insights on the adoption of digital technologies.
Content Type(s): Staff research, Staff analytical notes Topic(s): Firm dynamics, Inflation and prices, Service sector JEL Code(s): D, D2, D22, E, E3, E31, L, L8, L81, L9, L92, O, O3, O33

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Staff discussion papers

The Digital Economy—Insight from a Special Survey with IT Service Exporters

Staff Discussion Paper 2016-21 Wei Dong, James Fudurich, Lena Suchanek
Information technology (IT) is an increasingly integral part of everyday business and personal life reflecting the ongoing and accelerating digital transformation of the economy. In this paper, we present information gathered from a survey with export-oriented firms in the Canadian IT service industry and consultations with industry associations aimed at shedding light on this small but highly dynamic sector.
Content Type(s): Staff research, Staff discussion papers Topic(s): Firm dynamics, Service sector JEL Code(s): D, D2, D22, L, L8, L86, O, O3, O33

Exchange Rates and Individual Good’s Price Misalignment: Some Preliminary Evidence of Long-Horizon Predictability

Staff Discussion Paper 2011-8 Wei Dong, Deokwoo Nam
When prices are sticky, movements in the nominal exchange rate have a direct impact on international relative prices. A relative price misalignment would trigger an adjustment in consumption and employment, and may help to predict future movements in the exchange rate.
Content Type(s): Staff research, Staff discussion papers Topic(s): Exchange rates, International topics JEL Code(s): F, F3, F31, F4, F47

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Staff working papers

Non-Performing Loans, Fiscal Costs and Credit Expansion in China

Staff Working Paper 2018-53 Huixin Bi, Yongquan Cao, Wei Dong
This paper studies how the credit expansion policy pursued by the Chinese government in an effort to stimulate its economy in the post-crisis period affects bank–firm loan contracts and the macroeconomy. We build a structural model with financial frictions in which the optimal loan contract reflects the trade-off between leverage and the probability of default.
Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Fiscal policy, International topics JEL Code(s): E, E4, E44, E6, E62

Exchange Rate Pass-Through, Currency of Invoicing and Market Share

Staff Working Paper 2015-31 Michael Devereux, Wei Dong, Ben Tomlin
This paper investigates the impact of market structure on the joint determination of exchange rate pass-through and currency of invoicing in international trade. A novel feature of the study is the focus on market share of firms on both sides of the market—that is, exporting firms and importing firms.
Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Inflation and prices, Market structure and pricing JEL Code(s): F, F3, F4

The Sensitivity of Producer Prices to Exchange Rates: Insights from Micro Data

Staff Working Paper 2012-20 Shutao Cao, Wei Dong, Ben Tomlin
This paper studies the sensitivity of Canadian producer prices to the Canada-U.S. exchange rate. Using a unique product-level price data set, we estimate and analyze the impact of movements in the exchange rate on both domestic and export producer prices.
Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Inflation and prices, Market structure and pricing JEL Code(s): E, E3, E30, F, F3, F31, F4, F41, L, L1, L11

The Role of Expenditure Switching in the Global Imbalance Adjustment

Staff Working Paper 2010-16 Wei Dong
In theory, nominal exchange rate movements can lead to “expenditure switching” when they generate changes in the relative prices of goods across countries. This paper explores whether the expenditure-switching role of exchange rates has changed in the current episode of significant global imbalances.
Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, International topics JEL Code(s): F, F3, F4

Do Central Banks Respond to Exchange Rate Movements? Some New Evidence from Structural Estimation

Staff Working Paper 2008-24 Wei Dong
This paper investigates the impact of exchange rate movements on the conduct of monetary policy in Australia, Canada, New Zealand and the United Kingdom. We develop and estimate a structural general equilibrium two-sector model with sticky prices and wages and limited exchange rate pass-through.
Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, International topics, Monetary policy framework JEL Code(s): F, F3, F4

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Bank publications

Bank of Canada Review articles

November 19, 2010

Has Exchange Rate Pass-Through Really Declined? Some Recent Insights from the Literature

Bank of Canada Review - Autumn 2010 Jeannine Bailliu, Wei Dong, John Murray
Building on an earlier Review article, the authors critically reassess the premise that exchange rate pass-through (ERPT) has declined in light of recent studies of the issue in the context of a dynamic stochastic general-equilibrium framework.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Economic models, Exchange rates, Inflation and prices, Monetary policy framework

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Journal publications

Refereed journals

  • “Importers and Exporters in Exchange Rate Pass-Through and Currency Invoicing”
    (with Michael Devereux and Ben Tomlin), Journal of International Economics, March 2017, Volume 105, Pages 187-204.
  • “Pricing-to-Market, Currency Invoicing and Exchange Rate Pass-Through to Producer Prices”
    (with Shutao Cao and Ben Tomlin), Journal of International Money and Finance, 58, November 2015: 128-149.
  •  “Do Central Banks Respond to Exchange Rate Movements? Some New Evidence from Structural Estimation”
    Canadian Journal of Economics, 46(2), May 2013: 555-586.
  • “The Quantitative Importance of the Expenditure-Switching Effect”
    Open Economies Review, 24(2), 2013: 311-338.
  • “Exchange Rates and Individual Good's Price Misalignment: Evidence of Long-horizon Predictability”
    (with Deokwoo Nam), Journal of International Money and Finance, 32, February 2013: 611-636.
  • “The Role of Expenditure Switching in the Global Imbalance Adjustment”
    Journal of International Economics, 86(2), March 2012: 237-251.