Posts

• The Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model

  Staff Discussion Paper 2023-5 Martin Kuncl, Dmitry Matveev

  We use a small open economy model with overlapping generations to evaluate secular dynamics of the neutral rate in Canada from 1980 to 2018. We find that changes in both foreign and domestic factors resulted in a protracted decline in the neutral rate.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E2, E21, E22, E4, E43, E5, E50, E52, E58, F, F4, F41

• Learning in a Complex World: Insights from an OLG Lab Experiment

  Staff Working Paper 2023-13 Cars Hommes, Stefanie J. Huber, Daria Minina, Isabelle Salle

  This paper brings novel insights into group coordination and price dynamics in complex environments. We implement a chaotic overlapping-generation model in the lab and find that group coordination is always on the steady state or on the two-cycle and that behavior is non-monotonic.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): C, C6, C62, C68, C9, C91, C92, E, E1, E13, E7, E70, G, G1, G12, G4, G41
• February 16, 2023

  Our commitment to 2% inflation

  Speech summary Paul Beaudry Alberta School of Business Edmonton, Alberta

  Deputy Governor Paul Beaudry explains why the 2% target remains the centrepiece of the Bank of Canada’s inflation-targeting framework.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Exchange rates, Inflation targets
• February 16, 2023

  Speech by Paul Beaudry, Deputy Governor of the Bank of Canada

  On Thursday, February 16, 2023, Paul Beaudry, Deputy Governor of the Bank of Canada, will speak before the Alberta School of Business, University of Alberta.

  Content Type(s): Press, Media advisories
• February 16, 2023

  No two ways about it: Why the Bank is committed to getting back to 2%

  Remarks Paul Beaudry Alberta School of Business Edmonton, Alberta

  Deputy Governor Paul Beaudry discusses the benefits of being near the Bank’s 2% inflation target and the dangers of straying from it for too long.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Exchange rates, Inflation targets
• February 16, 2023

  Opening Statement before the House of Commons Standing Committee on Finance

  Opening statement Tiff Macklem House of Commons Standing Committee on Finance Ottawa, Ontario

  Content Type(s): Press, Speeches and appearances, Opening statements
• February 16, 2023

  Parliamentary Appearance by the Governor and the Senior Deputy Governor of the Bank of Canada

  On Thursday, February 16, 2023, the Governor of the Bank of Canada, Tiff Macklem, will appear before the House of Commons Standing Committee on Finance.

  Content Type(s): Press, Media advisories
• February 14, 2023

  About the Bank’s interest earnings

  The Bank of Canada’s balance sheet reflects the unique role it plays as Canada’s central bank. It is different from the balance sheets of other financial institutions—the assets and liabilities on the Bank’s balance sheet are intended to support its core functions rather than to generate profit.

  Content Type(s): Background materials

• The Role of Intermediaries in Selection Markets: Evidence from Mortgage Lending

  Staff Working Paper 2023-12 Jason Allen, Robert Clark, Jean-François Houde, Shaoteng Li, Anna Trubnikova

  This paper looks at the role mortgage brokers play in helping borrowers generate quotes and qualify for credit. We find that, on average, borrowers that engage with a mortgage broker pay lower interest rates. However, in about 15% of cases, borrowers are steered towards longer amortizing mortgages than they would have chosen absent a broker. Since mortgages with longer amortization have higher total interest costs over the entire life of the mortgage, this steering is expensive.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Financial services, Market structure and pricing JEL Code(s): D, D4, G, G2, G21, L, L2

• Inflation, Output, and Welfare in the Laboratory

  Staff Working Paper 2023-11 Janet Hua Jiang, Daniela Puzzello, Cathy Zhang

  We investigate the effect of inflation on output and welfare in the laboratory. Consistent with monetary theory, we find that inflation acts as a tax on monetary exchange and reduces output and welfare.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Inflation: costs and benefits, Monetary policy JEL Code(s): C, C9, C92, D, D8, D83, E, E4, E40