Staff working papers provide a forum for staff to publish work-in-progress research intended for journal publication.
1306
result(s)
Consumer Credit with Over-optimistic Borrowers
Staff Working Paper 2020-57
Florian Exler,
Igor Livshits,
James (Jim) C. MacGee,
Michèle Tertilt
When lenders cannot directly identify behavioural and rational borrowers, they use type scoring to track the likelihood of a borrower’s type. This leads to the partial pooling of borrowers, which results in rational borrowers subsidizing borrowing costs for behavioural borrowers. This, in turn, reduces the effectiveness of regulatory policies that target mistakes by behavioural borrowers.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Credit and credit aggregates,
Credit risk management,
Financial system regulation and policies
JEL Code(s):
E,
E2,
E21,
E4,
E49,
G,
G1,
G18,
K,
K3,
K35
Losing Contact: The Impact of Contactless Payments on Cash Usage
Staff Working Paper 2020-56
Marie-Hélène Felt
Contactless payment cards are a competitive alternative to cash. Using Canadian panel data from 2010 to 2017, this study investigates whether contactless credit cards are an important contributor to the decline in the transactional use of cash.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Bank notes,
Digital currencies and fintech,
Econometric and statistical methods,
Financial services
JEL Code(s):
C,
C3,
C33,
D,
D1,
D12,
E,
E4,
E41
Strategic Uncertainty in Financial Markets: Evidence from a Consensus Pricing Service
Staff Working Paper 2020-55
Lerby Ergun,
Andreas Uthemann
We look at the informational content of consensus pricing in opaque over-the-counter markets. We show that the availability of price data informs participants mainly about other participants’ valuations, rather than about the value of a financial security.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial markets,
Market structure and pricing
JEL Code(s):
C,
C5,
C58,
D,
D5,
D53,
D8,
D83,
G,
G1,
G12,
G14
Labor Market Policies During an Epidemic
Staff Working Paper 2020-54
Serdar Birinci,
Fatih Karahan,
Yusuf Mercan,
Kurt See
We study the labour market and welfare effects of expanding unemployment insurance benefits and introducing payroll subsidies during the COVID-19 pandemic. We find that both policies are complementary and are beneficial to different types of workers. Payroll subsidies preserve the employment of workers in highly productive jobs, while unemployment insurance replaces lost income for workers who experience inevitable job loss.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Coronavirus disease (COVID-19),
Fiscal policy,
Labour markets
JEL Code(s):
E,
E2,
E24,
E6,
E62,
J,
J6,
J64
Safe Payments
Staff Working Paper 2020-53
Jonathan Chiu,
Mohammad Davoodalhosseini,
Janet Hua Jiang,
Yu Zhu
In a cashless economy, would the private sector invest in the optimal level of safety in a deposit-based payment system? In general, because of externalities, the answer is no. While the private sector could over- or under-invest in safety, the government can use taxes or subsidies to correct private incentives.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Digital currencies and fintech,
Financial institutions,
Payment clearing and settlement systems
JEL Code(s):
E,
E4,
E42,
E5,
E50,
G,
G2,
G21
The Determinants of Consumers’ Inflation Expectations: Evidence from the US and Canada
Staff Working Paper 2020-52
Charles Bellemare,
Rolande Kpekou Tossou,
Kevin Moran
We compare the determinants of consumer inflation expectations in the US and Canada by analyzing two current surveys. We find that Canadian consumers rely more on professional forecasts and the history of actual inflation when forming their expectations, while US consumers rely more on their own lagged expectations.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Econometric and statistical methods,
Inflation and prices,
Inflation targets
JEL Code(s):
C,
C3,
C33,
D,
D8,
D83,
D84,
E,
E3,
E31
The Heterogeneous Effects of COVID-19 on Canadian Household Consumption, Debt and Savings
Staff Working Paper 2020-51
James (Jim) C. MacGee,
Thomas Michael Pugh,
Kurt See
The impact of COVID-19 on Canadian households’ debt and unplanned savings varies by household income. Low-income and high-income households accrued unplanned savings, while middle-income households tended to accumulate more debt.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Coronavirus disease (COVID-19),
Financial stability
JEL Code(s):
E,
E2,
E21,
E24,
G,
G5,
G51
A Macroeconomic Model of an Epidemic with Silent Transmission and Endogenous Self-isolation
Staff Working Paper 2020-50
Antonio Diez de los Rios
We study the interaction between epidemics and economic decisions in a model that has silent transmission of the virus. We find that rational behaviour strongly diminishes the severity of the epidemic but worsens the economic recession. We also find that the detection and isolation of not only symptomatic individuals but also those who are infected and asymptomatic or mildly symptomatic can reduce the severity of the recession caused by the pandemic.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Coronavirus disease (COVID-19),
Economic models
JEL Code(s):
E,
E1,
H,
H0,
I,
I1
Optimal Quantitative Easing in a Monetary Union
Staff Working Paper 2020-49
Serdar Kabaca,
Renske Maas,
Kostas Mavromatis,
Romanos Priftis
How should a central bank conduct quantitative easing (QE) in a monetary union when regions differ in their size and portfolio characteristics? Optimal QE policy suggests allocating greater purchases from the region that faces stronger portfolio frictions, and not necessarily according to each region’s size.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models,
Monetary policy
JEL Code(s):
E,
E4,
E43,
E5,
E52,
E58