E52 - Monetary Policy
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Forward Guidance and Expectation Formation: A Narrative Approach
How exactly does forward guidance influence interest rate expectations? -
What do high-frequency expenditure network data reveal about spending and inflation during COVID‑19?
The official consumer price index (CPI) inflation measure, based on a fixed basket set before the COVID 19 pandemic, may not fully reflect what consumers are currently experiencing. We partnered with Statistics Canada to construct a more representative index for the pandemic with weights based on real-time transaction and survey data. -
Monetary Policy and Cross-Border Interbank Market Fragmentation: Lessons from the Crisis
We present a two-country model featuring risky lending and cross-border interbank market frictions. -
Strengthening Inflation Targeting: Review and Renewal Processes in Canada and Other Advanced Jurisdictions
We summarize the review and renewal process at four central banks (Reserve Bank of New Zealand, Bank of England, Sveriges Riksbank and the US Federal Reserve Bank) and compare them with the process at the Bank of Canada, which has been well-established since 2001. -
Average is Good Enough: Average-inflation Targeting and the ELB
The Great Recession and current pandemic have focused attention on the constraint on nominal interest rates from the effective lower bound. -
How Do Mortgage Rate Resets Affect Consumer Spending and Debt Repayment? Evidence from Canadian Consumers
We study the causal effect of mortgage rate changes on consumer spending, debt repayment and defaults during an expansionary and a contractionary monetary policy episode in Canada. We find asymmetric responses of consumer durable spending, deleveraging and defaults. These findings help us to understand household sector response to interest rate changes. -
Endogenous Time Variation in Vector Autoregressions
We introduce a new class of time-varying parameter vector autoregressions (TVP-VARs) where the identified structural innovations are allowed to influence — contemporaneously and with a lag — the dynamics of the intercept and autoregressive coefficients in these models. -
Multi-Product Pricing: Theory and Evidence from Large Retailers in Israel
Standard theories of price adjustment are based on the problem of a single-product firm, and therefore they may not be well suited to analyze price dynamics in the economy with multiproduct firms. -
A Portfolio-Balance Model of Inflation and Yield Curve Determination
How does the supply of nominal government debt affect the macroeconomy? To answer this question, we propose a portfolio-balance model of the yield curve in which inflation is determined through an interest rate rule.