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
The Mutable Geography of Firms’ International Trade Staff working paper 2025-11 Lu Han Exporters frequently change their market destinations. This paper introduces a new approach to identifying the drivers of these decisions over time. Analysis of customs data from China and the UK shows most changes are driven by demand rather than supply-related shocks. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F1, F12, F14, L, L1, L11 Research Theme(s): Models and tools, Economic models, Structural challenges, International trade, finance and competitiveness
Price Discounts and Cheapflation During the Post-Pandemic Inflation Surge Staff working paper 2024-31 Alberto Cavallo, Oleksiy Kryvtsov We study how price variation within a store changes with inflation, and whether households exploit these changes to reduce the burden of inflation. We find that price changes from discounts mitigated the inflation burden while cheapflation exacerbated it. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E3, E30, E31, L, L8, L81 Research Theme(s): Financial markets and funds management, Market functioning, Monetary policy, Inflation dynamics and pressures
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
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
Survival Analysis of Bank Note Circulation: Fitness, Network Structure and Machine Learning Staff working paper 2020-33 Diego Rojas, Juan Estrada, Kim Huynh, David T. Jacho-Chávez Using the Bank of Canada's Currency Information Management Strategy, we analyze the network structure traced by a bank note’s travel in circulation and find that the denomination of the bank note is important in our potential understanding of the demand and use of cash. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C52, C6, C65, C8, C81, E, E4, E42, E5, E51 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes
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
Dynamic Consumer Cash Inventory Model Staff working paper 2025-22 Kim Huynh, Oleksandr Shcherbakov, André Stenzel We study consumer cash inventory behavior by developing a dynamic model of forward-looking consumers and estimating structural parameters of the model using detailed consumer survey data. Consumers facing holding and withdrawal costs solve a discrete-time continuous-control dynamic programming problem to optimally use cash at the point of sale. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, D12, D14, E, E4, E41, E42, G, G2, G21 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes
On the Evolution of the United Kingdom Price Distributions Staff working paper 2018-25 Ba M. Chu, Kim Huynh, David T. Jacho-Chávez, Oleksiy Kryvtsov We propose a functional principal components method that accounts for stratified random sample weighting and time dependence in the observations to understand the evolution of distributions of monthly micro-level consumer prices for the United Kingdom (UK). Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C14, C8, C83, E, E3, E31, E37 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures