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I study the welfare consequences of regulations on high-cost consumer credit in the United States and find that borrowing limits have distributional impacts on households with self-control issues.

The goal of this paper is to investigate and estimate long-run relationships among M1, prices, output and interest rates, with a view to determining if there is a stable relationship that can be interpreted as long-run money demand. The paper uses a maximum-likelihood multiple-equation cointegration technique, developed by Johansen, to fit a system of equations […]

We develop an asymmetric, two-country equilibrium business cycle model to study the role of international trade in transmitting and propagating the real effects of global financial shocks. Our model predicts that a recession in a large economy considerably alters a recession in its smaller trade partner, with distinct investment dynamics driving the transmission.

How do firms change their employment decisions when tax benefits for low-earning workers are expanded? Some firms increase employment overall, whereas others replace high-earning workers with low-earning workers, according to German linked employer-employee data.

The author introduces a central counterparty (CCP) into a model of a repo market. Without the CCP, there exist multiple equilibria in the model. In one of the equilibria, a repo market emerges as bond dealers and cash investors choose to arrange repos in an over-the-counter bond market.

In a recent speech, Deputy Governor Sheryl Kennedy discusses how the efficiency of Canada's capital markets compares in a global context. Taking into account the three inter-related aspects of an efficient market (allocational, operational, and informational efficiency), Kennedy reviews the recent performance of Canadian capital markets under such headings as size, completeness, and access to capital and the instruments needed to hedge, or distribute, risk (allocational efficiency). To assess operational efficiency, she considers Canadian markets' liquidity and whether their transactional costs are competitive. Finally, she reviews transparency and market integrity (and how integrity is maintained) to determine markets' informational efficiency. She also offers several suggestions as to how Canadian markets can continue to be improve and maintain their competitiveness.

We introduce a new framework that facilitates term structure modeling with both positive interest rates and flexible time-series dynamics but that is also tractable, meaning amenable to quick and robust estimation.

This paper theoretically and empirically examines the price impacts of liquidations in DeFi and how different liquidation mechanisms affect the price impacts.

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.

Optimal coordination of monetary and macroprudential policies implies higher risk weights on (safe) bonds any time that banks are required to hold additional capital buffers. Coordination also implies a somewhat tighter monetary-policy stance whenever such capital buffers are released.