E3 - Prices, Business Fluctuations, and Cycles
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Nowcasting Canadian GDP with Density Combinations
We present a tool for creating density nowcasts for Canadian real GDP growth. We demonstrate that the combined densities are a reliable and accurate tool for assessing the state of the economy and risks to the outlook. -
Uncertainty and Monetary Policy Experimentation: Empirical Challenges and Insights from Academic Literature
Central banks face considerable uncertainty when conducting monetary policy. The COVID-19 pandemic brought this issue back to the forefront of policy discussions. We draw from academic literature to review key sources of uncertainty and how they affect the conduct of monetary policy. -
Potential output and the neutral rate in Canada: 2022 reassessment
We expect potential output growth to be lower in 2021 than anticipated in the April 2021 assessment. By 2025, growth is expected to reach 2.3%. We assess that the Canadian nominal neutral rate increased slightly to lie in the range of 2.00% to 3.00%. -
Job Ladder and Business Cycles
During downturns, workers get stuck in low-productivity jobs and wages remain stagnant. I build an heterogenous agent incomplete market model with a full job ladder that accounts for these facts. An adverse financial shock calibrated to the US Great Recession replicates the period’s slow recovery and missing disinflation. -
Household Heterogeneity and the Performance of Monetary Policy Frameworks
Consumption inequality and a low interest rate environment are two important trends in today’s economy. But the implications they may have—and how those implications interact—within different monetary policy frameworks are not well understood. We study the ranking of alternative frameworks that take these trends into account. -
Macroeconomic Predictions Using Payments Data and Machine Learning
We demonstrate the usefulness of payment systems data and machine learning models for macroeconomic predictions and provide a set of econometric tools to overcome associated challenges. -
The Impact of Globalization and Digitalization on the Phillips Curve
Globalization is in retreat, yet digitalization is on the rise. How will these trends impact inflation? -
A Horse Race of Alternative Monetary Policy Regimes Under Bounded Rationality
We introduce bounded rationality in a canonical New Keynesian model calibrated to match Canadian macroeconomic data since Canada’s adoption of inflation targeting. We use the model to quantitatively assess the macroeconomic impact of alternative monetary policy regimes. -
Monetary Policy and Redistribution in Open Economies
We study how different types of monetary policy shape the distributional effects of external economic shocks on households’ consumption in a small open economy. Our results present a trade-off between maintaining overall stabilization and controlling consumption inequality.