Forecasting Risks to the Canadian Economic Outlook at a Daily Frequency Staff discussion paper 2023-19 Chinara Azizova, Bruno Feunou, James Kyeong This paper quantifies tail risks in the outlooks for Canadian inflation and real GDP growth by estimating their conditional distributions at a daily frequency. We show that the tail risk probabilities derived from the conditional distributions accurately reflect realized outcomes during the sample period from 2002 to 2022. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C3, C32, C5, C58, E, E4, E44, G, G1, G17 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
February 7, 2014 Flexible Inflation Targeting and “Good” and “Bad” Disinflation Remarks Tiff Macklem John Molson School of Business Concordia University Montréal, Quebec Senior Deputy Governor Tiff Macklem discusses flexible inflation targeting and “good” and “bad” disinflation. Content Type(s): Press, Speeches and appearances, Remarks
The Financial Origins of Non-fundamental Risk Staff working paper 2022-4 Sushant Acharya, Keshav Dogra, Sanjay Singh We explore the idea that the financial sector can be a source of non-fundamental risk to the rest of the economy. We also consider whether policy can be used to reduce this risk—either by increasing the supply of publicly backed safe assets or by reducing the demand for safe assets. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D5, D52, D8, D84, E, E6, E62, G, G1, G10, G12 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Household and business credit, Monetary policy, Monetary policy tools and implementation
Is a Cashless Society Problematic? Staff discussion paper 2018-12 Walter Engert, Ben Fung, Scott Hendry The use of bank notes in Canada for payments has declined consistently for some time, and similar trends are evident in other countries. This has led some observers to predict a cashless society in the future. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E4, E41, E42, E5 Research Theme(s): Financial system, Financial stability and systemic risk, Money and payments, Cash and bank notes, Digital assets and fintech, Retail payments
June 7, 2018 Establishing a Resolution Regime for Canada’s Financial Market Infrastructures Financial System Review - June 2018 Elizabeth Woodman, Lucia Chung, Nikil Chande This report highlights how an effective resolution regime promotes financial stability. It does this by ensuring that financial market infrastructures (FMIs) would be able to continue to provide their critical functions during a period of stress when an FMI’s own recovery measures were failing. The report explains the Bank of Canada’s new role as the resolution authority for FMIs, which will further bolster financial system resilience. Content Type(s): Publications, Financial System Review articles JEL Code(s): G, G1, G10, G19, G2, G20, G28, G29
Monetary Policy Transmission with Endogenous Central Bank Responses in TANK Staff working paper 2025-21 Lilia Maliar, Chris Naubert We study how the transmission of monetary policy innovations is affected by the endogenous response of the central bank to macroeconomic aggregates in a two-agent New Keynesian model. We focus on how the stance of monetary policy and the fraction of savers in the economy affect transmission. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C6, C61, C62, C63, E, E3, E31, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission
Estimating Policy Functions in Payments Systems Using Reinforcement Learning Staff working paper 2021-7 Pablo S. Castro, Ajit Desai, Han Du, Rodney J. Garratt, Francisco Rivadeneyra We demonstrate the ability of reinforcement learning techniques to estimate the best-response functions of banks participating in high-value payments systems—a real-world strategic game of incomplete information. Content Type(s): Staff research, Staff working papers JEL Code(s): A, A1, A12, C, C7, D, D8, D83, E, E4, E42, E5, E58 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Digital assets and fintech, Payment and financial market infrastructures
June 2, 2022 Economic progress report: Navigating a high inflation environment Remarks (delivered virtually) Paul Beaudry Gatineau Chamber of Commerce Gatineau, Quebec Bank of Canada Deputy Governor Paul Beaudry talks about the Bank’s latest interest rate announcement and the importance of keeping inflation expectations well anchored to prevent high inflation from becoming entrenched. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Monetary policy, Economy/Economic growth, Inflation, Inflation targeting framework
Assessing global potential output growth and the US neutral rate: April 2021 Staff analytical note 2021-5 Thomas J. Carter, Xin Scott Chen, Ali Jaffery, Christopher Hajzler, Jonathan Lachaine, Peter Shannon, Subrata Sarker, Graeme Westwood, Beiling Yan We expect global potential output growth to rise to 3 percent by 2022. Relative to the last assessment in October 2020, potential output growth has been revised up across all the regions. The range of the US neutral rate remains unchanged relative to the autumn 2020 assessment. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E1, E2, E4, E5, F, F0, O, O4 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Real economy and forecasting, Structural challenges, Demographics and labour supply
The Countercyclical Capital Buffer and International Bank Lending: Evidence from Canada Staff working paper 2021-61 David Xiao Chen, Christian Friedrich We examine the impact of the CCyB on foreign lending activities of Canadian banks. We show that the announcement of a tightening in another country’s CCyB leads to a decrease in the growth rate of cross-border lending between Canadian banks and borrowers in that other country. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, F, F2, F21, F3, F32, G, G2, G21, G28 Research Theme(s): Financial markets and funds management, International markets and currencies, Financial system, Financial stability and systemic risk, Financial system regulation and oversight