E - Macroeconomics and Monetary Economics

• Cyclicality of Schooling: New Evidence from Unobserved Components Models

  Staff Working Paper 2020-38 Barbara Sadaba, Sunčica Vujič, Sofia Maier

  What is the time-varying impact of economic cycles on decisions to invest in human capital?

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Econometric and statistical methods JEL Code(s): C, C3, C32, E, E3, I, I2, J, J2

• Predicting Payment Migration in Canada

  Staff Working Paper 2020-37 Anneke Kosse, Zhentong Lu, Gabriel Xerri

  Developments are underway to replace Canada’s two core payment systems with three new systems. We use a discrete choice model to predict migration patterns of end-users and financial institutions for future systems and discuss their policy implications.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Financial services, Financial stability, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): C, C3, E, E4, E42, G, G1, G2, G28

• What do high-frequency expenditure network data reveal about spending and inflation during COVID‑19?

  Staff Analytical Note 2020-20 Kim Huynh, Helen Lao, Patrick Sabourin, Angelika Welte

  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.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Inflation and prices, Payment clearing and settlement systems JEL Code(s): D, D1, D12, E, E3, E31, E4, E42, E5, E52

• Liquidity Usage and Payment Delay Estimates of the New Canadian High Value Payments System

  Staff Discussion Paper 2020-9 Francisco Rivadeneyra, Nellie Zhang

  As part of modernizing its core payments infrastructure, Canada will replace the Large Value Transfer System (LVTS) with a new Real-Time Gross Settlement (RTGS) system called Lynx. An important question for policy-makers is how Lynx should be designed.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Financial services, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): C, C5, E, E4, E42, E5, E58

• Why Do Central Banks Make Public Announcements of Open Market Operations?

  Staff Working Paper 2020-35 Narayan Bulusu

  Central banks communicate the results of open market operations. This helps participants in financial markets more accurately estimate the prevailing demand and supply conditions in the market for overnight loans.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Monetary policy implementation JEL Code(s): D, D5, D52, E, E5, E58, G, G2, G21

• 2019 Cash Alternative Survey Results

  Staff Discussion Paper 2020-8 Kim Huynh, Gradon Nicholls, Mitchell Nicholson

  The role of cash in Canadians’ lives has been evolving, as innovations in digital payments have become more widely adopted over the past decade. We contribute to the Bank of Canada’s research on central bank digital currency by monitoring Canadians’ use of cash and their adoption of digital payment methods.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Central bank research, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C1, C12, C9, E, E4, O, O5, O51

• Monetary Policy and Cross-Border Interbank Market Fragmentation: Lessons from the Crisis

  Staff Working Paper 2020-34 Tobias Blattner, Jonathan Swarbrick

  We present a two-country model featuring risky lending and cross-border interbank market frictions.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates, International financial markets, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E52, F, F3, F32, F36

• Survival Analysis of Bank Note Circulation: Fitness, Network Structure and Machine Learning

  Staff Working Paper 2020-33 Diego Rojas, Juan Estrada, Kim Huynh, David T. Jacho-Chávez

  Using the Bank of Canada's Currency Information Management Strategy, we analyze the network structure traced by a bank note’s travel in circulation and find that the denomination of the bank note is important in our potential understanding of the demand and use of cash.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Econometric and statistical methods, Payment clearing and settlement systems JEL Code(s): C, C5, C52, C6, C65, C8, C81, E, E4, E42, E5, E51

• Strengthening Inflation Targeting: Review and Renewal Processes in Canada and Other Advanced Jurisdictions

  Staff Discussion Paper 2020-7 Robert Amano, Thomas J. Carter, Lawrence L. Schembri

  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.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Inflation targets, Monetary policy framework JEL Code(s): E, E5, E52, E58

• Is the stock market pricing in a V‑shaped recovery?

  Staff Analytical Note 2020-17 James Kyeong

  Major stock indexes have bounced back from their March 23 trough to about 10 percent below their peaks. However, stocks that are more sensitive to the business cycle have not performed as well during this market rally. This suggests that stock markets are pricing in a slower, shallower economic recovery.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Asset pricing, Financial markets JEL Code(s): E, E4, E44, G, G1, G12, G14