Global Trade Flows: Revisiting the Exchange Rate Elasticities Staff working paper 2017-41 Matthieu Bussière, Guillaume Gaulier, Walter Steingress This paper contributes to the debate on the magnitude of exchange rate elasticities by providing a set of price and quantity elasticities for 51 advanced and emerging-market economies. Specifically, for each of these countries we report the elasticity of trade prices and trade quantities on both the export and on the import sides, as well as the reaction of the trade balance. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C51, F, F1, F14, F3, F31, F33, F4, F41 Research Theme(s): Financial markets and funds management, International markets and currencies, Structural challenges, International trade, finance and competitiveness
Shaping the future: Policy shocks and the GDP growth distribution Staff working paper 2021-24 Francois-Michel Boire, Thibaut Duprey, Alexander Ueberfeldt Can central bank and government policies impact the risks around the outlook for GDP growth? We find that fiscal stimulus makes strong GDP growth more likely—even more so when monetary policy is constrained—rather than weak GDP growth less likely. Thus, fiscal stimulus should accelerate the recovery phase of the COVID-19 pandemic. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C32, C5, C53, E, E5, E52, E6, E62 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
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 JEL Code(s): E, E2, E22, E3, E32, E4, E44, F, F4, F44 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Structural challenges, International trade, finance and competitiveness
Markets Look Beyond the Headline Staff analytical note 2018-37 Bruno Feunou, James Kyeong, Raisa Leiderman Many reports and analyses interpret the release of new economic data based on the headline surprise—for instance, total inflation, real GDP growth and the unemployment rate. However, we find that headline news alone cannot adequately explain the responses of market prices to new information. Rather, market prices react more strongly, on average, to non-headline news such as the composition of GDP growth, quality of jobs created and revisions to past data. Thus, tracking the impact of non-headline information released on the news day is crucial in analyzing how markets interpret and react to new economic data. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E43, G, G1, G12, G14 Research Theme(s): Financial markets and funds management, Market functioning, Monetary policy, Monetary policy framework and transmission
The Impact of Government Debt Supply on Bond Market Liquidity: An Empirical Analysis of the Canadian Market Staff working paper 2018-35 Jeffrey Gao, Jianjian Jin, Jacob Thompson This paper finds that Government of Canada benchmark bonds tend to be more illiquid over the subsequent month when there is a large increase in government debt supply. The result is both statistically and economically significant, stronger for the long-term than the short-term sector, and is robust when other macro factors are controlled for. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D5, D53, G, G1, G12, G18, G2, G3, G32 Research Theme(s): Financial markets and funds management, Funds management, Market functioning
Measuring household financial stress in Canada using consumer surveys Staff analytical note 2024-5 Nicolas Bédard, Patrick Sabourin We use data from the Canadian Survey of Consumer Expectations to understand how households are coping with high inflation and high interest rates. We build a subjective measure of financial stress and find that the level of stress is at a historical high but remains manageable for most households. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, D14, G, G5, H, H3 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting
Monetary Policy Implementation in a Negative Rate Environment Staff working paper 2017-25 Michael Boutros, Jonathan Witmer Monetary policy implementation could, in theory, be constrained by deeply negative rates since overnight market participants may have an incentive to invest in cash rather than lend to other participants. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E40, E42, E43, G, G0 Research Theme(s): Monetary policy, Monetary policy tools and implementation
A Financial Stability Analysis of Zombie Firms in Canada Staff analytical note 2020-3 Timothy Grieder, Juan Ortega We measure the prevalence of zombie firms in Canada and assess how they could potentially affect the financial system. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G3, G32 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit
June 13, 2013 Monitoring and Assessing Risks in Canada’s Shadow Banking Sector Financial System Review - June 2013 Toni Gravelle, Timothy Grieder, Stéphane Lavoie Content Type(s): Publications, Financial System Review articles
August 25, 2015 The Long-Term Evolution of House Prices: An International Perspective Remarks Lawrence L. Schembri Canadian Association for Business Economics Kingston, Ontario Deputy Governor Lawrence Schembri discusses the international evidence of underlying determinants of long-term movements in house prices. Content Type(s): Press, Speeches and appearances, Remarks