May 25, 2017 Upgrading the Payments Grid: The Payoffs Are Greater Than You Think Remarks Sylvain Leduc Payments Canada Toronto, Ontario Deputy Governor Sylvain Leduc discusses how upgrading Canada’s core payment systems will contribute to financial stability and help the Bank keep inflation on target. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Financial markets, Financial stability, Financial system regulation and policies, Monetary policy implementation, Payment clearing and settlement systems
A Comprehensive Evaluation of Measures of Core Inflation in Canada: An Update Staff Discussion Paper 2019-9 Helen Lao, Ceciline Steyn We provide an updated evaluation of the value of various measures of core inflation that could be used in the conduct of monetary policy. We find that the Bank of Canada’s current preferred measures of core inflation—CPI-trim, CPI-median and CPI-common—continue to outperform alternative core measures across a range of criteria. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Inflation and prices, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52
Modelling and Forecasting Housing Investment: The Case of Canada Staff Working Paper 2005-41 Frédérick Demers The author proposes and evaluates econometric models that try to explain and forecast real quarterly housing expenditures in Canada. Structural and leading-indicator models of the Canadian housing sector are described. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Economic models JEL Code(s): E, E2, E27, R, R2, R21
A Review of the Bank of Canada’s Market Operations Related to COVID-19 Staff Discussion Paper 2023-6 Grahame Johnson This paper reviews the range of extraordinary programs launched by the Bank of Canada in response to the pandemic-related financial market disruption. It provides some recommendations for future interventions to ensure the programs are appropriately structured for the financial and economic stresses they are intended to address. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Coronavirus disease (COVID-19), Financial markets, Financial stability JEL Code(s): D, D4, D47, E, E4, E41, E5, G, G0, G01, G1, G14, G2, G21, G23, H, H1, H12
October 3, 2006 A New Effective Exchange Rate Index for the Canadian Dollar Bank of Canada Review - Autumn 2006 Janone Ong An effective exchange rate is a measure of the value of a country's currency vis-à-vis the currencies of its most important trading partners. The Bank of Canada has created a new Canadian-dollar effective exchange rate index (CERI) to replace the C-6 index that it currently uses. The CERI uses multilateral trade weights published by the International Monetary Fund and includes the six currencies of countries or economic zones with the largest share of Canada's international trade. As such, it better reflects the recent changes in Canada's trade profile, including the rise in the importance of China and Mexico and the relative decline in importance of Europe and Japan in Canada's international trade. The author describes the methodology and construction of the new index and reviews the advantages it offers over the C-6, particularly the use of multilateral trade weights, the inclusion of trade in services, and the use of more recent trade data. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Exchange rates, Financial markets, Monetary and financial indicators
Understanding the Cash Demand Puzzle Staff Working Paper 2014-22 Janet Hua Jiang, Enchuan Shao We develop a model to explain a puzzling trend in cash demand in recent years: the value of bank notes in circulation as a percentage of GDP has remained stable despite decreasing cash usage at points of sale owing to competition from alternative means of payment such as credit cards. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes, Credit and credit aggregates, Digital currencies and fintech JEL Code(s): E, E4, E41, E5, E51
Avoiding the Pitfalls: Can Regime-Switching Tests Detect Bubbles? Staff Working Paper 1996-11 Simon van Norden, Robert Vigfusson Work on testing for bubbles has caused much debate, much of which has focussed on methodology. Monte Carlo simulations reported in Evans (1991) showed that standard tests for unit roots and cointegration frequently reject the presence of bubbles even when such bubbles are present by construction. Evans referred to this problem as the pitfall of testing for bubbles. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods JEL Code(s): C, C2, C22, C5, C52
June 23, 2005 A Brief Survey of Risk-Appetite Indexes Financial System Review - June 2005 Mark Illing, Meyer Aaron Content Type(s): Publications, Financial System Review articles
Monetary Policy Transmission, Bank Market Power, and Wholesale Funding Reliance Staff Working Paper 2023-35 Amina Enkhbold I study how banking market concentration and reliance on wholesale funding affect monetary policy transmission to mortgage rates. I find that this transmission is imperfect and dampens the response of consumption, output, and housing prices. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Inflation targets, Monetary policy transmission, Wholesale funding JEL Code(s): E, E4, E44, E5, E52, G, G2, G21
Redemption Runs in Canadian Corporate Bond Funds? Staff Analytical Note 2018-21 Rohan Arora Mutual funds employ a host of tools to manage redemption run risk. However, our results suggest that Canadian corporate bond funds may be vulnerable to redemption runs, especially when they are less liquid and when market volatility is high. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial institutions, Financial markets JEL Code(s): G, G0, G01, G2, G23