Posts
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How Rigid Are Nominal-Wage Rates?
This study examines the effect of nominal-wage rigidities on wage growth in Canada using a hazard model and micro data for union contracts. The hazard model is specified in a way that allows considerable flexibility in the shape of the estimated notional wage-change distribution. -
Excess Collateral in the LVTS: How Much is Too Much?
The authors build a theoretical model that generates demand for collateral by Large Value Transfer System (LVTS) participants under the assumption that they minimize the cost of holding and managing collateral for LVTS purposes. The model predicts that the optimal amount of collateral held by each LVTS participant depends on the opportunity cost of collateral, the transactions costs of acquiring assets used as collateral and transferring them in and out of the LVTS, and the distribution of an LVTS participant's payment flows in the LVTS. -
July 17, 2008
Monetary Policy Report Update – July 2008
Three major developments are affecting the Canadian economy: the protracted weakness in the U.S. economy; ongoing turbulence in global financial markets; and sharp increases in the prices of certain commodities — particularly energy. The first two developments are evolving roughly in line with expectations outlined in the April Monetary Policy Report. -
Emergency Liquidity Facilities, Signalling and Funding Costs
In the months preceding the failure of Lehman Brothers in September 2008, banks were willing to pay a premium over the Federal Reserve’s discount window (DW) rate to participate in the much less flexible Term Auction Facility (TAF). We empirically test the predictions of a new signalling model that offers a rationale for offering two different liquidity facilities. -
January 7, 2016
Expect policy divergence as economies adjust to shocks, Governor Poloz says
Diverging monetary policies are the natural consequence of large declines in resource prices and should be expected, Bank of Canada Governor Stephen S. Poloz said in a speech today at the Mayor’s Breakfast Series in Ottawa. Last month’s interest rate increase by the U.S. Federal Reserve is the first step in a long process toward […] -
The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications
We study the cyclical properties of sales, regular price changes and average prices paid by consumers (“effective” prices) using data on prices and quantities sold for numerous retailers across many U.S. metropolitan areas. -
Machine learning for economics research: when, what and how
This article reviews selected papers that use machine learning for economics research and policy analysis. Our review highlights when machine learning is used in economics, the commonly preferred models and how those models are used. -
October 15, 2003
Bank of Canada keeps target for the overnight rate at 2 3/4 per cent
The Bank of Canada today announced that it is maintaining its target for the overnight rate at 2 3/4 per cent. -
What to Expect When China Liberalizes Its Capital Account
When China joined the World Trade Organization in December 2001, it marked a watershed for the world economy. Ten years from now, the opening of China’s capital account and the financial integration that will unfold will be viewed as a milestone of similar importance.