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Inventories, Stockouts, and ToTEM

Staff Discussion Paper 2010-8 Oleksiy Kryvtsov, Yang Zhang
Inventory investment is an important component of the Canadian business cycle. Despite its small average size – less than 1 per cent of output – it exhibits volatile procyclical fluctuations, accounting for almost one-third of output variance.

The Fisher BCPI: The Bank of Canada’s New Commodity Price Index

Staff Discussion Paper 2010-6 Ilan Kolet, Ryan Macdonald
The prices of commodities produced in Canada have important implications for the performance of the Canadian economy and the conduct of monetary policy. The authors explain an important change to the methodology used to construct the Bank of Canada commodity price index (BCPI).

Relative Price Movements and Labour Productivity in Canada: A VAR Analysis

Staff Discussion Paper 2010-5 Michael Dolega, David Dupuis, Lise Pichette
In recent years, the Canadian economy has been affected by strong movements in relative prices brought about by the surging costs of energy and non-energy commodities, with significant implications for the terms of trade, the exchange rate, and the allocation of resources across Canadian sectors and regions.

Prospects for Global Current Account Rebalancing

The authors use the Bank of Canada's version of the Global Economy Model, a multi-country, multi-sector dynamic stochastic general-equilibrium model with an active banking system (the BoC-GEM-FIN), to study the evolution of global current account balances following the recent global financial crisis.

Le pouvoir de prévision des indices PMI

Staff Discussion Paper 2010-3 Claudia Godbout, Jocelyn Jacob
The forecast of world economic growth plays a key role in the conduct of Canadian monetary policy. In this context, the authors study the usefulness of the monthly Purchasing Managers’ Indexes (PMIs) in predicting short-term real GDP growth in the euro area, Japan, the United Kingdom, and China, as well as in the world economy.

Market Expectations and Option Prices: Evidence for the Can$/US$ Exchange Rate

Staff Discussion Paper 2010-2 Alejandro García, Andrei Prokopiw
Security prices contain valuable information that can be used to make a wide variety of economic decisions. To extract this information, a model is required that relates market prices to the desired information, and that ideally can be implemented using timely and low-cost methods.

The Power of Many: Assessing the Economic Impact of the Global Fiscal Stimulus

Staff Discussion Paper 2010-1 Carlos De Resende, René Lalonde, Stephen Snudden
The Bank of Canada Global Economy Model (BoC-GEM) is used to examine the effect of various types of discretionary fiscal policies on different regions of the globe. The BoC-GEM is a microfounded dynamic stochastic general-equilibrium global model with six regions, multiple sectors, and international linkages.

Regulatory Constraints on Bank Leverage: Issues and Lessons from the Canadian Experience

Staff Discussion Paper 2009-15 Étienne Bordeleau, Allan Crawford, Christopher Graham
The Basel capital framework plays an important role in risk management by linking a bank's minimum capital requirements to the riskiness of its assets. Nevertheless, the risk estimates underlying these calculations may be imperfect, and it appears that a cyclical bias in measures of risk-adjusted capital contributed to procyclical increases in global leverage prior to the recent financial crisis.
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