ElasticSearch Score: 5.417782
This study examines the impact of increased transparency, brought about by the introduction of three electronic trading systems, on the brokered interdealer market for Government of Canada benchmark securities. Using the CanPX dataset for the 2-, 5-, 10-, and 30-year benchmarks, the paper finds some evidence of decreased bid-ask spreads for the 30-year benchmark in the months following the introduction of the electronic platforms.
ElasticSearch Score: 5.415032
September 15, 2008
Between 2002 and 2008, global commodity prices rose to unprecedented levels. This article examines the process of adjustment to the commodity boom in four industrialized, commodity-exporting countries (Australia, Canada, New Zealand, and Norway). The article focuses on both the direct adjustment within the commodity-producing sectors (via increased employment and capital spending) and the indirect adjustment in the macro economy. The analysis finds that the indirect adjustment process, which was triggered by the increase in incomes that the commodity-price boom generated, has been the most important part of the adjustment in all four economies. Through this channel, aggregate demand rose, exchange rates appreciated, and adjustment was facilitated in other sectors, such as manufacturing and construction.
ElasticSearch Score: 5.409208
December 15, 1998
This commentary, completed in mid-January, discusses economic and financial developments in Canada since the publication of the November Monetary Policy Report.
Conditions in world financial markets have improved since November, but the global economic environment is still uncertain. The main uncertainty centres on Japan, which remains in recession. If bank reforms and stimulative fiscal measures are effectively implemented in that country, a gradual recovery should begin there during 1999. The economic expansion in other major industrialized countries, which together account for over half of world output, is expected to remain well sustained. The U.S. economy, in particular, continues to outstrip expectations and even if it slows, as expected, will likely still operate at high levels.
In Canada, indicators of domestic demand remain relatively firm, although the growth of monetary and credit aggregates has moderated. The Bank's outlook for 1999 continues to be one of ongoing economic expansion. Inflation is expected to stay in the lower half of the target range of 1 to 3 per cent.
Update on 23 February 1999:
The global economic environment in which Canada operates is still uncertain. In Japan, there is little sign yet that the economy is about to move out of its slump, while in Europe, the latest data point to a softening in economic activity. In sharp contrast, the U.S. economy continues to outstrip expectations, ending 1998 with growth of 5.6 per cent (annual rate) in the fourth quarter—much stronger growth than had been anticipated earlier.
Despite lingering economic uncertainty, global financial markets have been much more stable compared with last autumn and do not seem to have been substantially affected by the events in Brazil. This would appear to reflect the effects of reductions in official interest rates around the world since the autumn as well as the success some emerging-market economies have had in dealing with their problems. As a result, international investors and markets seem to have a renewed sense of their ability to assess and differentiate among debtor countries as well as other borrowers.
Here in Canada, even if we allow for the effects of temporary factors (such as the return to normal operations following the end of major labour disruptions), the underlying momentum of the economy is healthy. While resource-based export revenues remain weak, exports of other goods, particularly automotive products, surged in the closing months of 1998, bolstered by continued strong U.S. demand and Canada's improved competitive position. Growth in consumer spending eased through the latter part of 1998, mainly because of the effects on confidence of last autumn's financial turbulence and the end of financing incentives on automobile purchases. The reversal of these factors should have a beneficial effect on consumer demand early in 1999. Housing starts recovered in the fourth quarter, following the resolution of labour disputes, while business investment continued to expand modestly. The robust, broad-based employment gains recorded through the fourth quarter carried into January 1999.
On balance, recent data suggest that real GDP increased by about 4 per cent (annual rate) in the fourth quarter—at the upper end of the range expected at the time the commentary was completed.
The latest data point to core inflation fluctuating around the lower end of the inflation-control target range of 1 to 3 per cent. While upward pressure on the price level from the past exchange rate depreciation continues, the dampening effects of ongoing intense retail competition, excess supply in product markets, and restrained unit labour costs have kept overall inflation somewhat below expectations.
Improved financial market conditions, coupled with the general firmness of recent domestic economic data and a slightly more favourable outlook for commodity prices, have supported a stronger Canadian dollar since completion of the commentary. Because of this, monetary conditions have tightened somewhat further since mid-January.
With a measure of stability returning to global financial markets, concerns about the effects of financial volatility on consumer and business confidence in Canada have diminished. As noted in the commentary, such concerns were an important consideration for the Bank in the period following the Russian crisis, when particular emphasis had to be placed on calming financial markets. The easing of these pressures has made it possible to refocus attention on the medium-term policy objective of keeping the trend of inflation inside the target range.
ElasticSearch Score: 5.3934255
This paper surveys the recent literature on optimal currency areas (OCAs). Topics that are covered include theoretical developments in the context of general-equilibrium models and empirical work on shocks asymmetry and adjustment mechanisms. Issues relating to the endogeneity of OCA criteria, the role of exchange rate flexibility in promoting greater macroeconomic stability, and the links […]
ElasticSearch Score: 5.3383794
Using a two-stage model, we study the determinants of Canadian consumers’ choices of payment method at the point of sale. We estimate consumer preferences and adoption costs for various combinations of payment methods. We analyze how introducing a central bank digital currency would affect the market equilibrium.
ElasticSearch Score: 5.256845
We explore the macroeconomic effects of a compression in the long-term bond yield spread within the context of the Great Recession of 2007-2009 via a time-varying parameter structural VAR model.
ElasticSearch Score: 5.235454
December 23, 2005
The financial system makes an important contribution to the welfare of all Canadians. The ability of households and firms to confidently hold and transfer financial assets is one of the fundamental building blocks of the Canadian economy.
ElasticSearch Score: 5.2185397
April 16, 2006
Cover page
Depression Scrip
The examples of Depression scrip illustrated here are part of the National Currency Collection of the Bank of Canada.
ElasticSearch Score: 5.1958547
In recent years, the Canadian economy has been affected by strong movements in relative prices brought about by the surging costs of energy and non-energy commodities, with significant implications for the terms of trade, the exchange rate, and the allocation of resources across Canadian sectors and regions.
ElasticSearch Score: 5.180745
The author describes results obtained by using a new methodology to estimate potential output for the United Kingdom.