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Is There a Quality Bias in the Canadian CPI? Evidence from Micro Data

Staff Working Paper 2013-24 Oleksiy Kryvtsov
Rising consumer prices may reflect shifts by consumers to new higher-priced products, mostly for durable and semi-durable goods. I apply Bils’ (2009) methodology to newly available Canadian consumer price data for non-shelter goods and services to estimate how price increases can be divided between quality growth and price inflation.
Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Potential output JEL Code(s): E, E3, E31, M, M1, M11, O, O4, O47

A Blessing in Disguise: The Implications of High Global Oil Prices for the North American Market

Staff Working Paper 2013-23 Ron Alquist, Justin-Damien Guénette
We examine the implications of increased unconventional crude oil production in North America. This production increase has been made possible by the existence of alternative oil-recovery technologies and persistently elevated oil prices that make these technologies commercially viable.

The Threat of Counterfeiting in Competitive Search Equilibrium

Staff Working Paper 2013-22 Enchuan Shao
Recent studies in monetary theory show that if buyers can use lotteries to signal the quality of bank notes, counterfeiting does not occur in a pooling equilibrium. In this paper, I investigate the robustness of this non-existence result by considering an alternative trading mechanism.
Content Type(s): Staff research, Staff working papers Topic(s): Bank notes JEL Code(s): D, D8, D82, D83, E, E4, E42

Why Do Emerging Markets Liberalize Capital Outflow Controls? Fiscal versus Net Capital Flow Concerns

Staff Working Paper 2013-21 Joshua Aizenman, Gurnain Pasricha
In this paper, we provide empirical evidence on the factors that motivated emerging economies to change their capital outflow controls in recent decades. Liberalization of capital outflow controls can allow emerging-market economies (EMEs) to reduce net capital inflow (NKI) pressures, but may cost their governments the fiscal revenues that external financial repression generates.

Money Market Rates and Retail Interest Regulation in China: The Disconnect between Interbank and Retail Credit Conditions

Staff Working Paper 2013-20 Nathan Porter, TengTeng Xu
Interest rates in China are composed of a mix of both market-determined interest rates (interbank rates and bond yields), and regulated interest rates (retail lending and deposit rates), reflecting China’s gradual process of interest rate liberalization.

Business Cycle Effects of Credit Shocks in a DSGE Model with Firm Defaults

Staff Working Paper 2013-19 M. Hashem Pesaran, TengTeng Xu
This paper proposes a theoretical framework to analyze the relationship between credit shocks, firm defaults and volatility, and to study the impact of credit shocks on business cycle dynamics.
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