Short-Term Forecasting of the Japanese Economy Using Factor Models Staff Working Paper 2012-7 Claudia Godbout, Marco J. Lombardi While the usefulness of factor models has been acknowledged over recent years, little attention has been devoted to the forecasting power of these models for the Japanese economy. In this paper, we aim at assessing the relative performance of factor models over different samples, including the recent financial crisis. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, International topics JEL Code(s): C, C5, C50, C53, E, E3, E37, E4, E47
Macroprudential Rules and Monetary Policy when Financial Frictions Matter Staff Working Paper 2012-6 Jeannine Bailliu, Césaire Meh, Yahong Zhang This paper examines the interaction between monetary policy and macroprudential policy and whether policy makers should respond to financial imbalances. To address this issue, we build a dynamic general equilibrium model that features financial market frictions and financial shocks as well as standard macroeconomic shocks. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial markets, Financial stability, Monetary policy framework JEL Code(s): E, E4, E42, E5, E50, E6, E60
February 24, 2012 Weekly Financial Statistics - 24 February 2012 Content Type(s): Publications, Historical: Weekly Financial Statistics
February 24, 2012 A Monetary Policy Framework for All Seasons Remarks Mark Carney U.S. Monetary Policy Forum New York, New York Governor Mark Carney reviews the advantages of Canada’s flexible inflation-targeting regime. Content Type(s): Press, Speeches and appearances, Remarks
February 24, 2012 Flexible Inflation Targeting Appropriate Framework for All Seasons, Says Bank of Canada Governor Mark Carney Media Relations New York, New York In a speech today to the U.S. Monetary Policy Forum, Bank of Canada Governor Mark Carney reviewed the advantages of Canada’s flexible inflation-targeting regime. Citing a “complex and continuously evolving world that no one can predict with certainty,” Governor Carney said that flexible inflation targeting “provides a robust framework for all seasons.” A flexible inflation-targeting […] Content Type(s): Press, Press releases
February 24, 2012 Banking and Financial Statistics - February 2012 Content Type(s): Publications, Historical: Banking and Financial Statistics
February 23, 2012 Bank of Canada Review - Winter 2011-2012 This special issue, “Household Finances and Financial Stability,” examines recent Bank of Canada research into two interrelated facts: the steady increase in Canadian household indebtedness in recent decades, and the upward trend in real house prices in Canada since 2000. Rising house prices could lead to the accumulation of debt, and abrupt movements in either factor can influence the financial health of households, which are a central part of Canada’s economy. Content Type(s): Publications, Bank of Canada Review
February 23, 2012 What Explains Trends in Household Debt in Canada? Bank of Canada Review - Winter 2011-2012 Allan Crawford, Umar Faruqui Similar to the experiences in many other countries, household indebtedness in Canada has exhibited an upward trend over the past 30 years. Both mortgage and non-mortgage (consumer) credit have contributed to this development. In this article, the authors use microdata to highlight the main factors underlying the strong trend increase since the late 1990s. Favourable housing affordability, owing to factors such as income growth and low interest rates, has supported significant increases in home-ownership rates and mortgage debt. Much of the rise in consumer credit has been facilitated by higher housing values (used as collateral for loans) and financial innovation that makes it easier for households to access this credit. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Credit and credit aggregates JEL Code(s): D, D1, D12, D14, E, E5, E51
February 23, 2012 Household Borrowing and Spending in Canada Bank of Canada Review - Winter 2011-2012 Jeannine Bailliu, Katya Kartashova, Césaire Meh Understanding how much of the increased debt load of Canadian households has been used to finance household spending on consumption and home renovation is important for the conduct of monetary policy. In this article, the authors use a comprehensive data set that provides information on the uses of debt by Canadian households. They first present some facts regarding the evolution of Canadian household debt over the period from 1999 to 2010, emphasizing the increased importance of debt flows that are secured by housing. They then explore how Canadian households have used their borrowed funds over the same period, and assess the role of these borrowed funds in financing total consumption and spending on home renovation. Finally, they examine the possible effects of a decline in house prices on consumption when housing equity is used as collateral against household indebtedness. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Credit and credit aggregates, Domestic demand and components, Monetary policy transmission JEL Code(s): E, E2, E21, E5, E51, H, H3, H31