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295 result(s)

Natural disasters and inflation in Canada

Staff Analytical Note 2025-8 Thibaut Duprey, Victoria Fernandes
How do storms, floods and wildfires affect consumer prices? In the short term, natural disasters can significantly increase volatility in Canada-wide inflation. Over the long term, natural disasters influence inflation in shelter prices, especially when provincial output is already weak relative to trend.
Content Type(s): Staff research, Staff analytical notes Research Topic(s): Central bank research, Climate change, Inflation and prices JEL Code(s): E, E3, E31, Q, Q5, Q54

Markups, Pass-Through, and Firm Heterogeneity with Sequentially Mixed Search

Staff Working Paper 2025-7 Alex Chernoff, Allen Head, Beverly Lapham
Market power and pass-through of cost and demand shocks are studied in a market with free entry of heterogeneous firms and consumer mixed search. Equilibrium prices and markups are driven by variation in the elasticity of demand across firms. Improved conditions for buyers can either raise or lower market power.
Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices, Service sector JEL Code(s): D, D2, D21, D4, D43, E, E3, E31, L, L1, L11

Anchored Inflation Expectations: What Recent Data Reveal

Staff Working Paper 2025-5 Olena Kostyshyna, Isabelle Salle, Hung Truong
We analyze micro-level data from the Canadian Survey of Consumer Expectations through the lens of a heterogeneous-expectations model to study how inflation expectations form over the business cycle. We provide new insights into how households form expectations, documenting that forecasting behaviours, attention and noise in beliefs vary across socio-demographic groups and correlate with views about monetary policy.
Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices JEL Code(s): D, D8, D84, E, E3, E31, E7, E70

Bouncing Back: How Mothballing Curbs Prices

We investigate the macroeconomic impacts of mothballed businesses—those that closed temporarily—on sectoral equilibrium prices after a negative demand shock. Our results suggest that pandemic fiscal support for temporary closures may have eased inflationary pressures.

Consumer Search, Productivity Heterogeneity, Prices, Markups, and Pass-through: Theory and Estimation

Staff Working Paper 2024-50 Alex Chernoff, Allen Head, Beverly Lapham
We develop and estimate a search model in which identical consumers trade with price-setting firms that differ in productivity. We use the estimated model to characterize the qualitative and quantitative differences in prices and markups across firms. We explore how individual firms respond to changes in cost and demand and how they pass these through to their prices and markup.
Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices, Service sector JEL Code(s): E, E3, E31, L, L1, L16

Preferences, Monetary Policy and Household Inflation

Staff Working Paper 2024-45 Geoffrey R. Dunbar
I quantify the importance of changes in household preferences on household inflation rates using 11 years of scanner data for 11,000 US households. My results suggest that changes in household preferences are an important driver of inflation dynamics at the household level.
Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices, Monetary policy transmission JEL Code(s): D, D1, D12, E, E5, E52, E58

How Do Households Respond to Expected Inflation? An Investigation of Transmission Mechanisms

Staff Working Paper 2024-44 Janet Hua Jiang, Rupal Kamdar, Kelin Lu, Daniela Puzzello
We conduct surveys to study how consumer spending responds to higher inflation expectations. Most respondents spend the same, sticking to fixed budget plans or not considering inflation for spending decisions. About 20% decrease spending because they feel poorer and cut spending to invest in inflation-proof assets. Very few increase spending.

Monetary Policy Transmission amid Demand Reallocations

Staff Working Paper 2024-42 Julien Bengui, Lu Han, Gaelan MacKenzie
We analyze the transmission of monetary policy during different phases of a sectoral demand reallocation episode when there are frictions to increasing production in a sector. Monetary policy is more effective in reducing inflation when a larger proportion of sectors are expanding or expect to expand in the near future.

Immigration and US Shelter Prices: The Role of Geographical and Immigrant Heterogeneity

Staff Working Paper 2024-40 James Cabral, Walter Steingress
The arrival of immigrants increases demand for housing and puts upward pressure on shelter prices. Using instrumental variables based on the ancestry composition of residents in US counties, we estimate the causal impact of immigration on local shelter prices.

Does Unconventional Monetary and Fiscal Policy Contribute to the COVID Inflation Surge in the US?

Staff Working Paper 2024-38 Jing Cynthia Wu, Yinxi Xie, Ji Zhang
We assess whether unconventional monetary and fiscal policy implemented in response to the COVID-19 pandemic in the U.S. contribute to the 2021-2023 inflation surge through the lens of several different empirical methodologies and establish a null result.
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