Monetary Policy Under Uncertainty: Practice Versus Theory Staff Discussion Paper 2017-13 Rhys R. Mendes, Stephen Murchison, Carolyn A. Wilkins For central banks, conducting policy in an environment of uncertainty is a daily fact of life. This uncertainty can take many forms, ranging from incomplete knowledge of the correct economic model and data to future economic and geopolitical events whose precise magnitudes and effects cannot be known with certainty. Content Type(s): Staff research, Staff discussion papers Topic(s): Monetary policy, Monetary policy and uncertainty JEL Code(s): E, E5, E52, E58, E6, E61, E65
November 16, 2017 An Initial Assessment of Changes to the Bank of Canada’s Framework for Market Operations Bank of Canada Review - Autumn 2017 Kaetlynd McRae, Sean Durr, David Manzo The Bank of Canada made changes to several of the tools that make up its framework for operations and liquidity provision. These changes came about after a comprehensive re-view of the framework and are designed to help the Bank better achieve its objectives of reinforcing the target for the overnight rate and supporting the well-functioning of Cana-dian financial markets under normal market conditions. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial markets, Financial stability, Monetary policy framework, Monetary policy implementation, Monetary policy transmission, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E44, E5, E52, E58, G, G0, G01, G1, G18
November 7, 2017 Fundamental forces continue to drive inflation as economy evolves, Bank of Canada Governor Poloz says Media Relations Montréal, Quebec MONTRÉAL, QUEBEC—The fundamental forces that have always driven inflation will continue to do so, even as the global economy evolves, Bank of Canada Governor Stephen S. Poloz said today. In a speech to CFA Montréal and the Montreal Council on Foreign Relations, Governor Poloz challenged the idea that recent softness in inflation in many advanced […] Content Type(s): Press, Press releases
Aggregate Fluctuations and the Role of Trade Credit Staff Working Paper 2017-37 Lin Shao In an economy where production takes place in multiple stages and is subject to financial frictions, how firms finance intermediate inputs matters for aggregate outcomes. This paper focuses on trade credit—the lending and borrowing of input goods between firms—and quantifies its aggregate impacts during the Great Recession. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Firm dynamics JEL Code(s): E, E3, E32, E4, E44, E5, E51
Did the Renewable Fuel Standard Shift Market Expectations of the Price of Ethanol? Staff Working Paper 2017-35 Christiane Baumeister, Reinhard Ellwanger, Lutz Kilian It is commonly believed that the response of the price of corn ethanol (and hence of the price of corn) to shifts in biofuel policies operates in part through market expectations and shifts in storage demand, yet to date it has proved difficult to measure these expectations and to empirically evaluate this view. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial markets, Recent economic and financial developments JEL Code(s): Q, Q1, Q18, Q2, Q28, Q4, Q42, Q5, Q58
September 1, 2017 Bank of Canada scholarship encourages women to consider careers in economics and finance The Bank of Canada is now accepting applications for its inaugural Master’s Scholarship Award for Women in Economics and Finance. Content Type(s): Press, Announcements
Cross-Border Bank Flows and Monetary Policy: Implications for Canada Staff Working Paper 2017-34 Ricardo Correa, Teodora Paligorova, Horacio Sapriza, Andrei Zlate Using the Bank for International Settlements (BIS) Locational Banking Statistics data on bilateral bank claims from 1995 to 2014, we analyze the impact of monetary policy on cross-border bank flows. We find that monetary policy in a source country is an important determinant of cross-border bank flows. Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Monetary policy JEL Code(s): F, F3, F34, F36, G, G0, G01
Optimal Estimation of Multi-Country Gaussian Dynamic Term Structure Models Using Linear Regressions Staff Working Paper 2017-33 Antonio Diez de los Rios This paper proposes a novel asymptotic least-squares estimator of multi-country Gaussian dynamic term structure models that is easy to compute and asymptotically efficient, even when the number of countries is relatively large—a situation in which other recently proposed approaches lose their tractability. Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Econometric and statistical methods, Exchange rates, Interest rates JEL Code(s): E, E4, E43, F, F3, F31, G, G1, G12, G15
July 31, 2017 Research Update - July 2017 This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website. Content Type(s): Staff research, Research newsletters
July 26, 2017 Bank of Canada publishes its 2018 schedule for policy interest rate announcements and the release of the Monetary Policy Report Media Relations Ottawa, Ontario The Bank of Canada today published its 2018 schedule for policy interest rate announcements and the release of the quarterly Monetary Policy Report. Content Type(s): Press, Press releases