Posts
-
-
Nominal Rigidities and Exchange Rate Pass-Through in a Structural Model of a Small Open Economy
The authors analyze exchange rate pass-through in an estimated structural model of a small open economy that incorporates three types of nominal rigidity (wages and the prices of domestically produced and imported goods) and eight different structural shocks. The model is estimated using quarterly data from Canada and the United States. -
Ten Isn’t Large! Group Size and Coordination in a Large-Scale Experiment
Economic activities typically involve coordination among a large number of agents. These agents have to anticipate what other agents think before making their own decisions. -
A Model of the EFA Liabilities
The authors describe the liabilities model of the Exchange Fund Account (EFA). The EFA is managed using an asset-liability matching framework that requires currency and duration matching of both sides of the balance sheet. -
Estimation of the Default Risk of Publicly Traded Canadian Companies
Two models of default risk are prominent in the financial literature: Merton's structural model and Altman's non-structural model. -
May 19, 2021
Understanding the consumer price index
The consumer price index (CPI) tracks how much the average Canadian household spends, and how that changes over time. At the Bank of Canada, we use it to target inflation. -
Institutional Quality, Trade, and the Changing Distribution of World Income
Conventional wisdom holds that institutional changes and trade liberalization are two main sources of growth in per capita income around the world. -
The Effects of Budget Rules on Fiscal Performance and Macroeconomic Stabilization
Budget rules can be defined as legislated or constitutional constraints on government deficits, taxes, expenditures, or debt. This paper reviews the budget rules recently legislated in six of Canada's provinces and both of its territories, as well as budget rules in other OECD countries. -
July 29, 2019
Historical Assets Eligible as Collateral under the Bank of Canada’s Standing Liquidity Facility – July 29, 2019 to April 8, 2020
The Bank of Canada (the Bank), through its Standing Liquidity Facility (SLF), provides access to liquidity to those institutions that participate directly in the Large Value Transfer System (LVTS). -
May 11, 2017
Unconventional Monetary Policy: The Perspective of a Small Open Economy
How do unconventional monetary policies like quantitative easing and negative interest rates affect domestic financial conditions and the broader economy in small open econo-mies, such as Canada? These policies are effective in depreciating the exchange rate in small open economies, while lower interest rates are also passed through to the economy, albeit only partially. When conventional monetary policy is close to its limits, fiscal policy may be a more important complement to monetary policy in a small economy, particularly if global demand for safe assets compresses long-term interest rates.