Staff discussion papers

• The Positive Case for a CBDC

  Staff Discussion Paper 2021-11 Andrew Usher, Edona Reshidi, Francisco Rivadeneyra, Scott Hendry

  We discuss the competition and innovation arguments for issuing a central bank digital currency (CBDC). A CBDC could be an effective competition policy tool for payments. A CBDC could also support the vibrancy of the digital economy. It could help solve market failures and foster competition and innovation in new digital payments markets.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Digital currencies and fintech, Financial institutions, Financial stability JEL Code(s): E, E4, E42, E5, E58, L, L4, L5

• Sequencing Extended Monetary Policies at the Effective Lower Bound

  Staff Discussion Paper 2021-10 Yang Zhang, Lena Suchanek, Jonathan Swarbrick, Joel Wagner, Tudor Schlanger

  In this analysis, we use simulations in the Bank of Canada’s projection model—the Terms-of-Trade Economic Model—to consider a suite of extended monetary policies to support the economy following the COVID-19 crisis.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Coronavirus disease (COVID-19), Monetary policy, Monetary policy transmission JEL Code(s): E, E3, E4, E5, E52, E58

• Measuring and Evaluating Strategic Communications at the Bank of Canada

  Staff Discussion Paper 2021-9 Annie Portelance

  The Bank of Canada’s Communications Department has developed a framework to quantify and qualify the Bank’s communications efforts and their results. Using data-based measurement and evaluation, the department can assess the impact of the Bank’s communications activities and gauge the department’s contribution to the Bank’s overall goals.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Credibility, Monetary policy communications JEL Code(s): D, D8, D83

• An Exploration of First Nations Reserves and Access to Cash

  Staff Discussion Paper 2021-8 Heng Chen, Walter Engert, Kim Huynh, Daneal O’Habib

  Adequate cash distribution is one the Bank of Canada’s core interests. Canadians’ ability to access cash influences the Bank’s thinking on issuing a central bank digital currency. We provide a perspective on these issues by exploring access of First Nations reserves to cash.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Digital currencies and fintech, Financial institutions, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42, E5, G, G2, G21

• Adoption of Digital Technologies: Insights from a Global Survey Initiative

  Staff Discussion Paper 2021-7 James Fudurich, Lena Suchanek, Lise Pichette

  Firms are at the forefront of adopting new technology. Using survey data from a global network of central banks, we assess the effects of digitalization on firms’ pricing and employment decisions.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Firm dynamics, Inflation and prices, Labour markets JEL Code(s): D, D2, D22, E, E3, E31, J, J2, J21, O, O3, O33

• Stablecoin Assessment Framework

  Staff Discussion Paper 2021-6 Alejandro García, Bena Lands, Dennis Yanchus

  We offer relevant authorities a three-step assessment framework they can use to understand, identify and quantify the risks associated with stablecoin and other cryptocurrency arrangements.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Digital currencies and fintech, Financial institutions, Financial markets, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): D, D7, D78, D8, D81, G, G0, G01, G1, G18, O, O3, O38

• Occasionally Binding Constraints in Large Models: A Review of Solution Methods

  Staff Discussion Paper 2021-5 Jonathan Swarbrick

  Solving macroeconomic models is difficult. One challenge is the occasionally binding constraint of the zero lower bound on nominal interest rates. This paper reviews various ways to solve models that include this feature.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): C, C6

• Complementarities Between Fiscal Policy and Monetary Policy—Literature Review

  Staff Discussion Paper 2021-4 Wei Dong, Geoffrey R. Dunbar, Christian Friedrich, Dmitry Matveev, Romanos Priftis, Lin Shao

  This paper surveys and summarizes the literature on how fiscal policy and monetary policy can complement each other in stabilizing economic activity.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Fiscal policy, Monetary policy JEL Code(s): E, E5, E52, E58, E6, E62, E63

• Cash and COVID-19: The Effects of Lifting Containment Measures on Cash Demand and Use

  Staff Discussion Paper 2021-3 Heng Chen, Walter Engert, Kim Huynh, Gradon Nicholls, Julia Zhu

  Using Bank Note Distribution System data on the demand for cash up to September 2020, we find that demand was strong. This is true even though cash use for payments declined early in the pandemic. When mobility restrictions and lockdown measures were eased, cash use for payments increased sharply but remained less popular than electronic methods of payment.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Central bank research, Coronavirus disease (COVID-19), Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C1, C12, C9, E, E4, O, O5, O54

• COVID-19 Crisis: Lessons Learned for Future Policy Research

  Staff Discussion Paper 2021-2 Jean-Sébastien Fontaine, Corey Garriott, Jesse Johal, Jessica Lee, Andreas Uthemann

  One year later, we review the events that took place in Canadian fixed-income markets at the beginning of the COVID-19 crisis and propose potential policy research questions for future work.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Coronavirus disease (COVID-19), Financial markets, Monetary policy JEL Code(s): D, D4, D47, E, E4, E41, E5, G, G0, G01, G1, G14, G2, G20, G21, G23