Staff analytical notes are short articles that focus on topical issues relevant to the current economic and financial context.
234
result(s)
Firms’ inflation expectations and price-setting behaviour in Canada: Evidence from a business survey
Staff Analytical Note 2023-3
Ramisha Asghar,
James Fudurich,
Jane Voll
Canadian firms’ expectations for high inflation may be influencing their price setting, supporting strong price growth and delays in the transmission of monetary policy. Using data from the Business Outlook Survey, we investigate the reasons behind widespread price growth seen in Canada in 2021 and early 2022.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Firm dynamics,
Inflation and prices,
Monetary policy transmission,
Recent economic and financial developments
JEL Code(s):
D,
D2,
D22,
E,
E3,
E31
A central bank digital currency for offline payments
Staff Analytical Note 2023-2
Cyrus Minwalla,
John Miedema,
Sebastian Hernandez,
Alexandra Sutton-Lalani
Offline functionality is a key consideration for a potential CBDC. We describe the different types of offline functionality based on their duration outside of network connection—either intermittent (for short periods) or extended (for longer periods). We discuss the advantages and drawbacks of each and consider implications for end-user devices, system resilience and universal accessibility.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Central bank research,
Digital currencies and fintech
JEL Code(s):
E,
E4,
E42,
E5,
E51,
E58,
O,
O3,
O31
Introducing the Bank of Canada’s Market Participants Survey
Staff Analytical Note 2023-1
Annick Demers,
Tamara Gomes,
Stephane Gignac
The Market Participants Survey (MPS) gathers financial market participants’ expectations for key macroeconomic and financial variables and for monetary policy. This staff analytical note describes the MPS’s objectives and main features, its process and design, and how Bank of Canada staff use the results.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Financial markets,
Monetary policy and uncertainty,
Recent economic and financial developments
JEL Code(s):
C,
C8,
C83,
E,
E4,
E44,
E5,
E52,
E58,
G,
G1,
G12,
G14
Potential benefits and key risks of fiat-referenced cryptoassets
Staff Analytical Note 2022-20
Hugh Ding,
Natasha Khan,
Bena Lands,
Cameron MacDonald,
Laura Zhao
Cryptoassets that reference a national currency (commonly known as stablecoins) aim to peg their value to the reference currency and typically use a reserve of traditional financial assets to maintain the peg. The market value of these fiat-referenced cryptoassets has grown more than thirtyfold between early 2020 and mid-2022. We explore some of their potential benefits and key risks.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Digital currencies and fintech,
Financial institutions,
Financial markets,
Financial system regulation and policies,
Payment clearing and settlement systems
JEL Code(s):
E,
E4,
G,
G2,
G28,
L,
O,
O3
Variable-rate mortgages with fixed payments: Examining trigger rates
Staff Analytical Note 2022-19
Stephen Murchison,
Maria teNyenhuis
We estimate the share of variable-rate mortgages with fixed payments that reached the so-called trigger rate—the interest rate at which mortgage payments no longer cover the principal. Amid rising interest rates, this share was close to 50% at the end of October 2022 and could potentially reach 65% in 2023.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Credit and credit aggregates,
Financial institutions,
Interest rates,
Recent economic and financial developments
JEL Code(s):
D,
D1,
E,
E4,
E5,
G,
G2,
G21
Canada’s Beveridge curve and the outlook for the labour market
Staff Analytical Note 2022-18
Alexander Lam
Canada’s labour market is tight but beginning to ease. Unemployment will likely rise in turn, but the economy can avoid a recessionary surge given current conditions. Higher unemployment would nonetheless be material, especially for those directly impacted.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Business fluctuations and cycles,
Central bank research,
Labour markets,
Recent economic and financial developments
JEL Code(s):
E,
E3,
E32,
J,
J2,
J20,
J6,
J63,
J64
Core inflation over the COVID-19 pandemic
Staff Analytical Note 2022-17
Mikael Khan,
Elyse Sullivan
We assess the usefulness of various measures of core inflation over the COVID-19 pandemic. We find that Cpi-trim and CPI-median provided the best signal of underlying inflation. The favourable performance of these measures stems from their lack of reliance on historical experience, an especially valuable feature in unprecedented times.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Econometric and statistical methods,
Inflation and prices,
Monetary policy
JEL Code(s):
C,
C1,
C18,
E,
E3,
E31
Considerations for the allocation of non-default losses by financial market infrastructures
Staff Analytical Note 2022-16
Daniele Costanzo,
Radoslav Raykov
Non-default losses of financial market infrastructures (FMIs) have gained attention due to their potential impacts on FMIs and FMI participants, and the lack of a common approach to address them. A key question is, who should absorb these losses?
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Financial markets,
Financial system regulation and policies
JEL Code(s):
G,
G2,
G23,
G28,
G3,
G32,
G33
Examining recent revisions to CPI-common
Staff Analytical Note 2022-15
Elyse Sullivan
Unusually large revisions to CPI-common in recent months stem from increased common movements across consumer price index components amid broad inflationary pressures. With recent revisions, CPI-common is more closely aligned with the Bank of Canada’s other two preferred measures of core inflation. However, caution is necessary when interpreting real-time estimates of CPI-common in the current environment.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Econometric and statistical methods,
Inflation and prices
JEL Code(s):
C,
C1,
C13,
C18,
E,
E3,
E31