June 15, 2005
Posts
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Low Inflation in Advanced Economies: Facts and Drivers
Since the global financial crisis, core inflation has been persistently below target in most advanced economies. Recently, it has weakened further in several advanced economies despite gradually diminishing slack. This note reviews recent developments in core inflation across advanced economies and identifies distinctive patterns across regions. -
Trends in Firm Entry and New Entrepreneurship in Canada
Recently released data show downward trends for both the firm entry rate and the rate of new entrepreneurship since the early 1980s in Canada. This paper documents these trends and discusses potential explanations. -
October 23, 2002
Monetary Policy Report – October 2002
Over the past year, Canada’s economy has outperformed the economies of virtually all the other major industrial countries. -
November 18, 2010
Bank of Canada Review - Autumn 2010
The premise that exchange rate pass-through has declined is critically reassessed; intensity in the negative feedback process between financial sector developments and the real economy during the recent global crisis is examined; update on past decade’s changing trends in debt issuance in Canada relative to those in other capital markets. -
Predicting the Demand for Central Bank Digital Currency: A Structural Analysis with Survey Data
How much of a CBDC would Canadian households want to hold, and what design features of a CBDC would they care about? -
August 15, 2001
Analyzing the Monetary Aggregates
In recent years, the Bank has put renewed emphasis on analyzing monetary variables and on developing models that incorporate money as an active part of the transmission mechanism. In this article, Dinah Maclean describes how the monetary aggregates are used in the formulation of monetary policy analysis at the Bank, outlining the key tools and models used. The most important money-based model currently in use is the M1-VECM. In this model, deviations in the money supply from the long-term demand for money cause changes in inflation. The author briefly describes the "active-money" paradigm underlying this model and explains the key equations within it. Other simpler empirical models are also outlined, including single-equation indicator models for output based on the narrow aggregates, a neural network, and a model based on the broader aggregate M2++. A detailed technical annex provides details on model equations and coefficient values. -
Consumer Bankruptcy and Information
We analyze the relationship between the intensity of banks’ use of soft-information and household bankruptcy patterns. Using a unique data set on the universe of Canadian household bankruptcies, we document that bankruptcy rates are higher in markets where the collection of soft, or qualitative locally gathered information, is the weakest. -
Borrowing Costs for Government of Canada Treasury Bills
The cost of borrowing Government of Canada treasury bills (t-bills) in the repurchase (repo) market is mainly explained by the relationship between the parties involved. Some pairs of parties conduct most of their repos for t-bills rather than bonds, and at relatively high borrowing costs. We speculate that these pairs have formed a mutually beneficial service relationship in which one party consistently receives t-bills, while the other receives cash at a relatively cheap rate. -
Uncertainty and Multiple Paradigms of the Transmission Mechanism
An important challenge facing central banks is making decisions under uncertainty about the dynamic effects of monetary policy actions. The authors stress the importance of explicitly recognizing uncertainty about the transmission mechanism when formulating policy advice. They argue that one way to manage monetary policy under uncertainty is to draw on both an output-gap paradigm […]