May 16, 2016
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2360
result(s)
May 16, 2016
The Micro and Macro of Downward Nominal Wage Rigidity
The article examines the extent of downward nominal wage rigidity in Canada and its implications for monetary policy. The authors ask whether its existence is a sufficient argument for a higher inflation target if concerns about the effective lower bound are adequately addressed.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation and prices,
Inflation targets,
Labour markets,
Monetary policy framework
JEL Code(s):
E,
E3,
E4,
E5,
J,
J2,
J23,
J3,
J30
May 16, 2016
A New Era of Central Banking: Unconventional Monetary Policies
Central banks can implement unconventional monetary policy measures to provide additional easing when policy interest rates come close to their lower limit. To date, the international experience with tools such as quantitative easing and negative interest rates has been largely positive. Central banks may also use several such measures simultaneously, with often mutually reinforcing effects. Yet, unconventional tools are also subject to potential limits, and the costs associated with these measures could rise with extensive and prolonged use.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Interest rates,
International topics,
Monetary policy framework,
Monetary policy transmission
JEL Code(s):
E,
E5,
E52,
E58,
E6,
E61,
E65
May 16, 2016
Monetary Policy Frameworks: Recent International Developments
Inflation-targeting frameworks have remained relatively stable over the past few years despite significant challenges, including prolonged low inflation, a large negative commodity price shock and rising financial stability concerns in some economies. The tools used by central banks have, however, evolved substantially. This article provides a survey of the developments in the inflation-targeting frameworks of 10 central banks in advanced economies that correspond to the three research areas of the Bank of Canada’s 2016 renewal: the level of the inflation target, the measurement of core inflation and financial stability considerations in the formulation of monetary policy.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Inflation targets,
International topics,
Monetary policy framework
JEL Code(s):
E,
E5,
E52,
E58
Housing and Tax-Deferred Retirement Accounts
Staff Working Paper 2016-24
Anson T. Y. Ho,
Jie Zhou
Assets in tax-deferred retirement accounts (TDA) and housing are two major components of household portfolios. In this paper, we develop a life-cycle model to examine the interaction between households’ use of TDA and their housing decisions.
Identification and Estimation of Risk Aversion in First-Price Auctions with Unobserved Auction Heterogeneity
Staff Working Paper 2016-23
Serafin Grundl,
Yu Zhu
This paper shows point identification in first-price auction models with risk aversion and unobserved auction heterogeneity by exploiting multiple bids from each auction and variation in the number of bidders. The required exclusion restriction is shown to be consistent with a large class of entry models.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods
JEL Code(s):
C,
C1,
C14,
C5,
C57,
D,
D4,
D44,
L,
L0,
L00
Estimating Systematic Risk Under Extremely Adverse Market Conditions
Staff Working Paper 2016-22
Maarten van Oordt,
Chen Zhou
This paper considers the problem of estimating a linear model between two heavy-tailed variables if the explanatory variable has an extremely low (or high) value. We propose an estimator for the model coefficient by exploiting the tail dependence between the two variables and prove its asymptotic properties.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Financial markets
JEL Code(s):
C,
C1,
C14,
G,
G0,
G01
Early Warning of Financial Stress Events: A Credit-Regime-Switching Approach
Staff Working Paper 2016-21
Fuchun Li,
Hongyu Xiao
We propose an early warning model for predicting the likelihood of a financial stress event for a given future time, and examine whether credit plays an important role in the model as a non-linear propagator of shocks.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Financial stability
JEL Code(s):
C,
C1,
C12,
C14,
G,
G0,
G01,
G1,
G17
Retail Order Flow Segmentation
Staff Working Paper 2016-20
Corey Garriott,
Adrian Walton
In August 2012, the New York Stock Exchange launched the Retail Liquidity Program (RLP), a trading facility that enables participating organizations to quote dark limit orders executable only by retail traders.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial markets,
Financial system regulation and policies,
Market structure and pricing
JEL Code(s):
G,
G1,
G14,
G2,
G20,
L,
L1,
L10
What to Expect When China Liberalizes Its Capital Account
Staff Discussion Paper 2016-10
Mark Kruger,
Gurnain Pasricha
When China joined the World Trade Organization in December 2001, it marked a watershed for the world economy. Ten years from now, the opening of China’s capital account and the financial integration that will unfold will be viewed as a milestone of similar importance.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Balance of payments and components,
Exchange rate regimes,
International topics
JEL Code(s):
F,
F3,
F31,
F32,
G,
G1,
G18