D8 - Information, Knowledge, and Uncertainty

• Are Long-Horizon Expectations (De-)Stabilizing? Theory and Experiments

  Staff Working Paper 2019-27 George Evans, Cars Hommes, Isabelle Salle, Bruce McGough

  Most models in finance assume that agents make trading plans over the infinite future. We consider instead that they are boundedly rational and may only form forecasts over a limited horizon.

  Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Central bank research, Economic models, Financial markets JEL Code(s): C, C9, C92, D, D8, D84, E

• Online Privacy and Information Disclosure by Consumers

  Staff Working Paper 2019-22 Shota Ichihashi

  A consumer discloses information to a multi-product seller, which learns about the consumer’s preferences, sets prices, and makes product recommendations. While the consumer benefits from accurate product recommendations, the seller may use the information to price discriminate.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models JEL Code(s): D, D8, D82, D83

• Central Bank Communication That Works: Lessons from Lab Experiments

  Staff Working Paper 2019-21 Oleksiy Kryvtsov, Luba Petersen

  We use controlled laboratory experiments to test the causal effects of central bank communication on economic expectations and to distinguish the underlying mechanisms of those effects. In an experiment where subjects learn to forecast economic variables, we find that central bank communication has a stabilizing effect on individual and aggregate outcomes and that the size of the effect varies with the type of communication.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy implementation, Monetary policy transmission JEL Code(s): C, C9, D, D8, D84, E, E3, E5, E52

• Non-Resident Taxes and the Role of House Price Expectations

  Staff Analytical Note 2019-8 Mikael Khan, Matthieu Verstraete

  In recent years, the governments of Ontario and British Columbia have imposed taxes on purchases by non-Canadian residents of residential properties in certain jurisdictions.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Financial stability, Housing JEL Code(s): D, D8, D84, R, R2, R21

• Limiting Sender’s Information in Bayesian Persuasion

  Staff Working Paper 2019-10 Shota Ichihashi

  This paper studies how the outcome of Bayesian persuasion depends on a sender’s information. I study a game in which, prior to the sender’s information disclosure, the designer can restrict the most informative signal that the sender can generate.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models JEL Code(s): D, D8, D82, D83

• Inequality in Parental Transfers, Borrowing Constraints and Optimal Higher Education Subsidies

  Staff Working Paper 2019-7 Youngmin Park

  This paper studies optimal education subsidies when parental transfers are unequally distributed across students and cannot be publicly observed. After documenting substantial inequality in parental transfers among US college students with similar family resources, I examine its implications for how the education subsidy should vary with schooling level and family resources to minimize inefficiencies generated by borrowing constraints.

  Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Potential output, Productivity JEL Code(s): D, D1, D14, D6, D61, D64, D8, D82, I, I2, I22, J, J2, J24

• 2017 Methods-of-Payment Survey Report

  Staff Discussion Paper 2018-17 Christopher Henry, Kim Huynh, Angelika Welte

  Cash use is declining while contactless and mobile payments are on the rise.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): D, D8, D83, E, E4, E41

• Readability and the Bank of Canada

  Staff Analytical Note 2018-20 Alexandre Deslongchamps

  In this note, I assess the readability of Bank of Canada publications using a formula commonly used for this type of evaluation. I find that Bank publications are more difficult to read than the media articles and other content our target audiences likely consume. This suggests that more simple writing can help the Bank better meet its communication objectives.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Credibility, Monetary policy communications JEL Code(s): D, D8, D83

• Blockchain Revolution Without the Blockchain

  Staff Analytical Note 2018-5 Hanna Halaburda

  The technology behind blockchain has attracted a lot of attention. However, this technology is for the most part not well understood. There is no consensus on what benefits it may bring or on how it may fail.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Digital currencies and fintech, Recent economic and financial developments, Service sector JEL Code(s): D, D8, G, G2, O, O3, O33

• Adverse Selection with Heterogeneously Informed Agents

  Staff Working Paper 2018-7 Mohammad Davoodalhosseini

  A model of over-the-counter markets is proposed. Some asset buyers are informed in that they can identify high quality assets. Heterogeneous sellers with private information choose what type of buyers they want to trade with.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial markets, Financial stability, Financial system regulation and policies, Market structure and pricing JEL Code(s): D, D4, D40, D8, D82, D83, G, G0, G01, G1, G10, G2, G20