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2120 Results

Trading on Long-term Information

Staff working paper 2020-20 Corey Garriott, Ryan Riordan
Investors who trade based on good research are said to be the backbone of stock markets: They conduct research to discover the value of stocks and, through their trading, guide financial prices to reflect true value. What can make their job difficult is that high-speed, short-term traders could use machine learning and other technologies to infer when informed investors are trading.
October 22, 2006

ToTEM: The Bank of Canada's New Projection and Policy-Analysis Model

The Terms-of-Trade Economic Model, or ToTEM, replaced the Quarterly Projection Model (QPM) in December 2005 as the Bank's principal projection and policy-analysis model for the Canadian economy. Benefiting from advances in economic modelling and computer power, ToTEM builds on the strengths of QPM, allowing for optimizing behaviour on the part of firms and households, both in and out of steady state, in a multi-product environment. The authors explain the motivation behind the development of ToTEM, provide an overview of the model and its calibration, and present several simulations to illustrate its key properties, concluding with some indications of how the model is expected to evolve going forward.

SME Failures Under Large Liquidity Shocks: An Application to the COVID-19 Crisis

We study the effects of financial frictions on firm exit when firms face large liquidity shocks. We develop a simple model of firm cost-minimization that introduces a financial friction that limits firms’ borrowing capacity to smooth temporary shocks to liquidity.

Competing Currencies in the Laboratory

Staff working paper 2017-53 Janet Hua Jiang, Cathy Zhang
We investigate competition between two intrinsically worthless currencies as a result of decentralized interactions between human subjects. We design a laboratory experiment based on a simple two-country, two-currency search model to study factors that affect circulation patterns and equilibrium selection.

The Evolution of Unobserved Skill Returns in the U.S.: A New Approach Using Panel Data

Staff working paper 2017-61 Lance Lochner, Youngmin Park, Youngki Shin
Economists disagree about the factors driving the substantial increase in residual wage inequality in the United States over the past few decades. To identify changes in the returns to unobserved skills, we make a novel assumption about the dynamics of skills (especially among older workers) rather than about the stability of skill distributions across cohorts, as is standard.
February 10, 2021

Payments innovation beyond the pandemic

Remarks (delivered virtually) Timothy Lane Institute for Data Valorisation Montréal, Quebec
Deputy Governor Timothy Lane talks about how the Bank of Canada is contributing to the modernization of our payments ecosystem, and how the COVID-19 pandemic has highlighted the need to make payments more convenient for all Canadians.

Anticipating changes in bank capital buffer requirements

Staff analytical note 2025-27 Josef Schroth
Time-varying capital buffer requirements are a powerful tool that allow bank regulators to avoid severe financial stress without the cost of imposing very high levels of capital. However, this tool is only effective if banks understand how it is used. I present a model that banks and financial market participants can use to anticipate how time-varying capital buffer requirements change over time.

Assessing tariff pass-through to consumer prices in Canada: Lessons from 2018

Staff analytical note 2025-18 Alexander Lam
US trade protectionism is making the economic outlook increasingly uncertain. To assess how consumer prices may respond to tariffs, we examine a tariff episode from 2018 using detailed microdata and the synthetic control method.

No Double Standards: Quantifying the Impact of Standard Harmonization on Trade

Staff working paper 2019-36 Julia Schmidt, Walter Steingress
Product standards are omnipresent in industrialized societies. Though standardization can be beneficial for domestic producers, divergent product standards have been categorized as a major obstacle to international trade. This paper quantifies the effect of standard harmonization on trade flows and characterizes the extent to which it changes the cost and demand structure of exporting.
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