Improving the Efficiency of Payments Systems Using Quantum Computing Staff Working Paper 2022-53 Christopher McMahon, Donald McGillivray, Ajit Desai, Francisco Rivadeneyra, Jean-Paul Lam, Thomas Lo, Danica Marsden, Vladimir Skavysh We develop an algorithm and run it on a hybrid quantum annealing solver to find an ordering of payments that reduces the amount of system liquidity necessary without substantially increasing payment delays. Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Financial institutions, Financial services, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): C, C6, C61, C63, D, D8, D83, E, E4, E42, E5, E58
Agency Costs, Risk Shocks and International Cycles Staff Working Paper 2016-2 Marc-André Letendre, Joel Wagner We add agency costs as in Carlstrom and Fuerst (1997) into a two-country, two-good international business-cycle model. In our model, changes in the relative price of investment arise endogenously. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, International topics JEL Code(s): E, E2, E22, E3, E32, E4, E44, F, F4, F44
Interaction of Macroprudential and Monetary Policies: Practice Ahead of Theory Staff Discussion Paper 2024-18 Thibaut Duprey, Yaz Terajima, Jing Yang We draw on the Canadian experience to examine how monetary and macroprudential policies interact and possibly complement each other in achieving their respective price and financial stability objectives. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial stability, Monetary policy JEL Code(s): E, E3, E37, E5, E52, E58, E6, E61, G, G0, G01, G2, G21, G28
Sterilized Intervention in Emerging-Market Economies: Trends, Costs, and Risks Staff Discussion Paper 2008-4 Robert Lavigne The author examines recent trends in sterilized intervention among emerging-market economies, to determine the size and extent of this policy in relation to earlier periods of heavy reserve accumulation. He then analyzes whether the domestic costs and risks of substantial and prolonged sterilization are beginning to manifest themselves. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Exchange rate regimes, Financial stability, International topics JEL Code(s): E, E5, E52, F, F3, F31, O, O2, O24
Entry and Exit in Treasury Auctions Staff Working Paper 2024-29 Jason Allen, Ali Hortaçsu, Eric Richert, Milena Wittwer This paper introduces and estimates a structural model of the Canadian primary market for government debt. We assess the role of dealer exit in this market as a key reason for increased, yet irregular, customer entry and quantify the benefits of greater customer competition against the costs of higher market volatility. Content Type(s): Staff research, Staff working papers Research Topic(s): Debt management, Financial institutions, Financial markets, Market structure and pricing JEL Code(s): D, D4, D44, D47, G, G1, G12, G2, G28
December 21, 2006 Financial System Review - December 2006 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. Content Type(s): Publications, Financial Stability Report
Time-Consistent Control in Non-Linear Models Staff Working Paper 2007-3 Steve Ambler, Florian Pelgrin We show how to use optimal control theory to derive optimal time-consistent Markov-perfect government policies in nonlinear dynamic general equilibrium models, extending the result of Cohen and Michel (1988) for models with quadratic objective functions and linear dynamics. We replace private agents' costates by flexible functions of current states in the government's maximization problem. Content Type(s): Staff research, Staff working papers Research Topic(s): Fiscal policy, Monetary policy framework JEL Code(s): C, C6, C63, E, E6, E61, E62
The Macroeconomic Effects of Debt Relief Policies During Recessions Staff Working Paper 2023-48 Soyoung Lee A large-scale reduction in mortgage principal can strengthen a recovery, support house prices and lower foreclosures. The nature of the intervention shapes its impact, which rests on how resources are redistributed across households. The availability of bankruptcy on unsecured debt changes the response to large-scale mortgage relief by reducing precautionary savings. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Debt management, Housing JEL Code(s): E, E2, E21, E3, E32, E6
Measurement of the Output Gap: A Discussion of Recent Research at the Bank of Canada Technical Report No. 79 Pierre St-Amant, Simon van Norden In this paper, we discuss some methodologies for estimating potential output and the output gap that have recently been studied at the Bank of Canada. The assumptions and econometric techniques used by the different methodologies are discussed in turn, and applications to Canadian data are presented. Content Type(s): Staff research, Technical reports Research Topic(s): Potential output JEL Code(s): D, D2, D24
Assessing the Impact of the Bank of Canada’s Government Bond Purchases Staff Discussion Paper 2024-5 Chinara Azizova, Jonathan Witmer, Xu Zhang In March 2020, the Bank of Canada implemented the Government of Canada Bond Purchase Program, eventually purchasing approximately $340 billion of government bonds. In this paper, we analyze the impact of this program on financial market prices and yields as well as on GDP and inflation. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions, Financial markets, Financial system regulation and policies, Inflation and prices, Monetary policy, Monetary policy transmission JEL Code(s): E, E5, E52, E58, G, G2, G21, G28