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 Topic(s): Business fluctuations and cycles, International topics JEL Code(s): E, E2, E22, E3, E32, E4, E44, F, F4, F44
Capital-Goods Imports and US Growth Staff Working Paper 2018-1 Michele Cavallo, Anthony Landry Capital-goods imports have become an increasing source of growth for the U.S. economy. To understand this phenomenon, we build a neoclassical growth model with international trade in capital goods in which agents face exogenous paths of total factor and investment-specific productivity measures. Content Type(s): Staff research, Staff working papers Topic(s): Productivity, Trade integration JEL Code(s): E, E2, F, F2, F4, O, O3, O4
The Power of Helicopter Money Revisited: A New Keynesian Perspective Staff Discussion Paper 2020-1 Thomas J. Carter, Rhys R. Mendes We analyze money financing of fiscal transfers (helicopter money) in two simple New Keynesian models: a “textbook” model in which all money is non-interest-bearing (e.g., all money is currency), and a more realistic model with interest-bearing reserves. Content Type(s): Staff research, Staff discussion papers Topic(s): Credibility, Economic models, Fiscal policy, Inflation targets, Interest rates, Monetary policy, Monetary policy and uncertainty, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E1, E12, E4, E41, E43, E5, E51, E52, E58, E6, E61, E63
May 11, 1996 Recent developments in monetary aggregates and their implications Bank of Canada Review - Spring 1996 Louis-Robert Lafleur, Walter Engert In 1995, the broad aggregate M2+ grew at an annual rate of 4.5 per cent—almost twice the rate recorded in 1994—as competition from mutual funds drew less money from personal savings deposits. An adjusted M2+ aggregate, which internalizes the effect of close substitutes such as CSBs and certain mutual funds, grew by only 3.4 per cent. Gross M1 grew by 8.2 per cent during the year, reflecting an increased demand for transactions balances as market interest rates declined and as banks offered more attractive rates of interest on corporate current account balances. The robust growth of gross M1 in the second half of 1995 suggests a moderate expansion of economic activity in the first half of 1996, while moderate growth in the broad aggregates indicates a rate of monetary expansion consistent with continued low inflation. In this annual review of the monetary aggregates, the authors also introduce a new model, based on calculated deviations of M1 from its long-run demand, which suggests that inflation should remain just below the midpoint of the inflation-control target range over the next couple of years. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Monetary aggregates, Recent economic and financial developments
Towards a HANK Model for Canada: Estimating a Canadian Income Process Staff Discussion Paper 2020-13 Iskander Karibzhanov How might one simulate a million realistic income paths and compute their statistical moments in under a second? Using CUDA-based methods to estimate the Canadian earnings process, I find that the distribution of labour income growth is sharply peaked with heavy tails—similar to that in the United States. Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Labour markets JEL Code(s): D, D3, D31, E, E2, E24, J, J3, J31
Retail Order Flow Segmentation Staff Working Paper 2016-20 Corey Garriott, Adrian Walton In August 2012, the New York Stock Exchange launched the Retail Liquidity Program (RLP), a trading facility that enables participating organizations to quote dark limit orders executable only by retail traders. Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial system regulation and policies, Market structure and pricing JEL Code(s): G, G1, G14, G2, G20, L, L1, L10
How Oil Supply Shocks Affect the Global Economy: Evidence from Local Projections Staff Discussion Paper 2019-6 Olivier Gervais We provide empirical evidence on the impact of oil supply shocks on global aggregates. To do this, we first extract structural oil supply shocks from a standard oil-price determination model found in the literature. Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, International topics JEL Code(s): C, C2, C22, C5, E, E3, E37, Q, Q4, Q43
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 Topic(s): Domestic demand and components, Financial stability, Monetary policy transmission, Recent economic and financial developments JEL Code(s): D, D1, D14, G, G5, H, H3
What Accounts for the U.S.-Canada Education-Premium Difference? Staff Working Paper 2009-4 Oleksiy Kryvtsov, Alexander Ueberfeldt This paper analyzes the differences in wage ratios of university graduates to less than university graduates, the education premium, in Canada and the United States from 1980 to 2000. Both countries experienced a similar increase in the fraction of university graduates and a similar increase in skill biased technological change based on capital-embodied technological progress, but only the United States had a large increase in the education premium. Content Type(s): Staff research, Staff working papers Topic(s): Labour markets, Productivity JEL Code(s): E, E2, E24, E25, J, J2, J24, J3, J31
Measuring the Effectiveness of Salespeople: Evidence from a Cold-Drink Market Staff Working Paper 2021-40 Haofeng Jin, Zhentong Lu Salespeople are widely employed in many industries. We leverage a unique data set on retail sales from a leading Chinese cold-drink manufacturer and information on the firm’s salespeople assignment rule to measure the causal effect of salespeople on product revenue. Content Type(s): Staff research, Staff working papers Topic(s): Labour markets, Service sector JEL Code(s): L, L8, L81, M, M3, M5