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284 result(s)

A Horse Race of Alternative Monetary Policy Regimes Under Bounded Rationality

Staff Discussion Paper 2022-4 Joel Wagner, Tudor Schlanger, Yang Zhang
We introduce bounded rationality in a canonical New Keynesian model calibrated to match Canadian macroeconomic data since Canada’s adoption of inflation targeting. We use the model to quantitatively assess the macroeconomic impact of alternative monetary policy regimes.

Payment Coordination and Liquidity Efficiency in the New Canadian Wholesale Payments System

Staff Discussion Paper 2022-3 Francisco Rivadeneyra, Nellie Zhang
We study the impact of the Bank of Canada’s choice of settlement mechanism in Lynx on participant behaviors, liquidity usage, payment delays and the overall operational efficiency of the new system.

Heterogeneity and Monetary Policy: A Thematic Review

The theory that rich economic diversity of businesses and households both affects and is shaped by economy-wide fluctuations has strong implications for monetary policy. This review places these insights in a Canadian context.

Transition Scenarios for Analyzing Climate-Related Financial Risk

Climate transition scenarios clarify climate-related risks to our economy and financial system. This paper summarizes key results of Canada-relevant scenarios developed in a pilot project on climate risk by the Bank of Canada and the Office of the Superintendent of Financial Institutions.

Revisiting the Monetary Sovereignty Rationale for CBDCs

Staff Discussion Paper 2021-17 Skylar Brooks
One argument for central bank digital currencies (CBDCs) is that without them, private and foreign digital monies could displace domestic currencies, threatening the central bank’s monetary policy and lender of last resort capabilities. I revisit this monetary sovereignty rationale and offer a wider view—one that considers a broader set of currency functions and captures important cross-country variation.

Updated Methodology for Assigning Credit Ratings to Sovereigns

We update the Bank of Canada’s credit rating methodology for sovereigns, including our approach to assessing their fiscal position and monetary policy flexibility. We also explicitly consider climate-related factors.

Assessing Labour Market Slack for Monetary Policy

Staff Discussion Paper 2021-15 Erik Ens, Laurence Savoie-Chabot, Kurt See, Shu Lin Wee
Measuring labour market slack is essential for central banks: without full employment in the economy, inflation will not stay close to target. We propose a comprehensive approach to assessing labour market slack that reflects the complexity and diversity of the labour market.

The Bank of Canada’s “Horse Race” of Alternative Monetary Policy Frameworks: Some Interim Results from Model Simulations

Staff Discussion Paper 2021-13 José Dorich, Rhys R. Mendes, Yang Zhang
Bank of Canada staff are running a “horse race” of alternative monetary policy frameworks in the lead-up to 2021 renewal of the Bank’s monetary policy framework. This paper summarizes some interim results of model simulations from their research.

Cash and COVID-19: The impact of the second wave in Canada

The COVID-19 pandemic significantly increased the demand for cash. Cash in circulation increased sharply from March through December 2020, particularly in the early months of this period. Although use of electronic methods of payment also increased significantly, cash use for payments remains high for low-value transactions and among certain demographic groups.
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