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2380
result(s)
Evaluating the Effects of Forward Guidance and Large-scale Asset Purchases
Staff Working Paper 2021-54
Xu Zhang
I propose a novel method to identify and estimate the macroeconomic effects of forward guidance and large-scale asset purchases (LSAP) for each FOMC announcement. I find that LSAP is more important than forward guidance in influencing output and inflation. LSAP puts upward pressure on short-term yields, so it should always be used in conjunction with forward guidance.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Central bank research,
Econometric and statistical methods,
Interest rates
JEL Code(s):
E,
E5,
G,
G0
What to Target? Insights from a Lab Experiment
Staff Working Paper 2021-53
Isabelle Salle
In a laboratory experiment, we ask participants to predict inflation using three different policy regimes: inflation targeting—with and without greater communication of the target—average inflation targeting and price level targeting. We use participants’ predictions to compare the level and stability of inflation under each regime.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Monetary policy communications,
Monetary policy framework
JEL Code(s):
C,
C9,
C92,
E,
E3,
E31,
E5,
E52,
E7
What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data
Staff Working Paper 2021-52
Alberto Cavallo,
Oleksiy Kryvtsov
Did supply disruptions and cost pressures play a role in rising inflation in 2020 during the COVID-19 pandemic? Using data collected from websites of large retailers in multiple sectors and countries, we show that shortages may indicate transitory inflationary pressures.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Coronavirus disease (COVID-19),
Inflation and prices
JEL Code(s):
D,
D2,
D22,
E,
E3,
E31,
E37
Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight
Staff Working Paper 2021-51
Michael Woodford,
Yinxi Xie
How do outcomes of monetary and fiscal stabilization policies at the zero lower bound change when decision makers have finite planning horizons in the economy? We explore the effects of limited foresight on policy tools and the interaction between monetary and fiscal policy.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Central bank research,
Fiscal policy,
Monetary policy
JEL Code(s):
E,
E5,
E52,
E6,
E63,
E7
The impact of the Bank of Canada’s Government Bond Purchase Program
Staff Analytical Note 2021-23
Rohan Arora,
Sermin Gungor,
Joe Nesrallah,
Guillaume Ouellet Leblanc,
Jonathan Witmer
We assess the response of Government of Canada bond yields to the Bank of Canada’s initial announcement of the Government Bond Purchase Program (GBPP) as well as to the Bank’s later GBPP purchase operations.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Monetary policy,
Monetary policy implementation,
Monetary policy transmission
JEL Code(s):
E,
E5,
E52,
E58,
E6,
E63
Systemic Risk and Portfolio Diversification: Evidence from the Futures Market
Staff Working Paper 2021-50
Radoslav Raykov
This paper explores how the Canadian futures market contributed to banks’ systemic risk during the 2008 financial crisis. It finds that core banks as a whole traded against the periphery, in this way increasing their risk of simultaneous losses.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial markets
JEL Code(s):
G,
G1,
G10,
G2,
G20
Job Applications and Labour Market Flows
Staff Working Paper 2021-49
Serdar Birinci,
Kurt See,
Shu Lin Wee
Although the number of job applications has risen, job-finding rates remain relatively unchanged while job-separation rates have significantly declined. Rather than raising the probability of finding a job, we find that a rise in applications raises the probability of finding a good match, as evidenced by the decline in separation rates.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Labour markets,
Productivity
JEL Code(s):
E,
E2,
E24,
J,
J6,
J63,
J64
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.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Business fluctuations and cycles,
Coronavirus disease (COVID-19),
Econometric and statistical methods,
Labour markets,
Monetary policy
JEL Code(s):
E,
E2,
E24,
J,
J2,
J21,
J6
Foreign Exchange Fixings and Returns Around the Clock
Staff Working Paper 2021-48
Ingomar Krohn,
Philippe Mueller,
Paul Whelan
We document a new empirical finding in the foreign exchange market: currency returns show systematic reversals around the benchmark fixings. Specifically, the US dollar, on average, appreciates in the hours before fixes and depreciates after fixes.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Financial markets,
Market structure and pricing
JEL Code(s):
F,
F3,
F31,
G,
G1,
G15