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2358
result(s)
Earnings Dynamics and Intergenerational Transmission of Skill
Staff Working Paper 2020-46
Lance Lochner,
Youngmin Park
How are your past, current and future earnings related to those of your parents? We explore this by using 37 years of Canadian tax data on two generations.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Labour markets,
Potential output,
Productivity
JEL Code(s):
C,
C3,
C33,
J,
J2,
J24,
J6,
J62
Understanding Trend Inflation Through the Lens of the Goods and Services Sectors
Staff Working Paper 2020-45
Yunjong Eo,
Luis Uzeda,
Benjamin Wong
The goods and services sectors have experienced considerably different dynamics over the past three decades. Our goal in this paper is to understand how such contrasting behaviors at the sectoral level affect the aggregate level of trend inflation dynamics.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Inflation and prices,
Monetary policy transmission
JEL Code(s):
C,
C1,
C11,
C3,
C32,
E,
E3,
E31,
E5,
E52
Corporate investment and monetary policy transmission in Canada
Staff Analytical Note 2020-26
Min Jae Kim,
Jonathan Witmer
Unexpected changes in interest rates lead small firms to materially change their investment rate. Large firms, in contrast, show a smaller response. This suggests both that financial conditions are an important channel for transmitting monetary policy and that firm characteristics can help us better understand fluctuations in business investment.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Firm dynamics,
Monetary policy,
Monetary policy transmission
JEL Code(s):
D,
D2,
D22,
D9,
D92,
G,
G3,
G31,
G32
Production Networks and the Propagation of Commodity Price Shocks
Staff Working Paper 2020-44
Shutao Cao,
Wei Dong
We examine the macro implications of commodity price shocks in a model with multiple production sectors that are interconnected within a commodity-exporting small open economy.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
International topics
JEL Code(s):
D,
D5,
D57,
F,
F4,
F41
Outside Investor Access to Top Management: Market Monitoring versus Stock Price Manipulation
Staff Working Paper 2020-43
Josef Schroth
Should managers be paid in stock options if they provide stock-market participants with information about the firm? This paper studies how firm owners trade off the benefit of stock-price incentives and better-informed market participants against the cost of potential stock-price manipulation.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Financial markets,
Recent economic and financial developments
JEL Code(s):
D,
D8,
D82,
D86,
G,
G1,
G14,
G3,
G32,
G34,
M,
M1,
M12,
M4,
M41
Potential output in Canada: 2020 reassessment
Staff Analytical Note 2020-25
Dany Brouillette,
Julien Champagne,
Julien McDonald-Guimond
After COVID-19, we expect potential output growth to stabilize around 1.2 percent. This is lower than the 2010–18 average growth of 1.8 percent. Relative to the April 2019 reassessment, the growth profile is revised down. Given the unknown course of the pandemic, uncertainty around these estimates is higher than in previous years.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Labour markets,
Potential output,
Productivity
JEL Code(s):
E,
E0,
E00,
E2,
E23,
E24,
E3,
E37,
E6
The neutral rate in Canada: 2020 update
Staff Analytical Note 2020-24
Dmitry Matveev,
Julien McDonald-Guimond,
Rodrigo Sekkel
The neutral rate of interest is important for central banks because it helps measure the stance of monetary policy. We present updated estimates of the neutral rate in Canada using the most recent data. We expect the COVID-19 pandemic to significantly affect the fundamental drivers of the Canadian neutral rate.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Economic models,
Interest rates,
Monetary policy
JEL Code(s):
E,
E4,
E40,
E43,
E5,
E50,
E52,
E58,
F,
F4,
F41
Announcing the Bankers’ Acceptance Purchase Facility: a COVID‑19 event study
Staff Analytical Note 2020-23
Rohan Arora,
Sermin Gungor,
Kaetlynd McRae,
Jonathan Witmer
The Bank of Canada launched the Bankers’ Acceptance Purchase Facility (BAPF) to ensure that the bankers’ acceptance (BA) market could continue to function well during the financial crisis induced by the COVID‑19 pandemic. We review the impact that the announcement of this facility had on BA yields in the secondary market. We find that BA yield spreads declined by 15 basis points on the day of the announcement and by up to 70 basis points over a longer period. Using an econometric framework, we quantify the effect of the announcement and confirm early assertions presented in the Bank’s 2020 Financial System Review.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Financial markets,
Financial stability
JEL Code(s):
G,
G1,
G2,
G20,
G23
Canadian stock market since COVID‑19: Why a V-shaped price recovery?
Staff Analytical Note 2020-22
Jean-Sébastien Fontaine,
Guillaume Ouellet Leblanc,
Ryan Shotlander
Between February 19 and March 23, 2020, the Canadian stock market plunged due to the severe economic impact of COVID-19. By the end of the summer, the stock market had already recovered a significant portion of its losses, leaving many asking if investors see the economy through rose-coloured glasses. Despite these concerns, we find that current market valuations for companies on the Toronto Stock Exchange align well, on average, with the declines in earning forecasts observed since the start of the year. We also find these market valuations are consistent with the discount rate returning to its pre-pandemic level.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Asset pricing,
Coronavirus disease (COVID-19),
Financial markets
JEL Code(s):
G,
G1,
G12,
G14