November 24, 2004 Bank of Canada Review - Autumn 2004 Cover page Bus Transportation Tokens and Tickets The pieces illustrated on the cover range in size from 12 mm to 38 mm in diameter or width. They form part of the National Currency Collection, Bank of Canada. Photography by Gord Carter, Ottawa Content Type(s): Publications, Bank of Canada Review
Digitalization: Prices of Goods and Services Staff discussion paper 2023-27 Vivian Chu, Tatjana Dahlhaus, Christopher Hajzler This paper outlines and assesses the various channels through which digitalization can affect prices of goods and services. Content Type(s): Staff research, Staff discussion papers JEL Code(s): D, D2, E, E3, E31, E5, E52, L, L1, L11 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Structural challenges, Digitalization and productivity
June 16, 2008 A Money and Credit Real-Time Database for Canada Bank of Canada Review - Summer 2008 Roobina Keshishbanoosy, Pierre St-Amant, Devin Ball, Ivan Medovikov Model-based forecasts of important economic variables are part of the range of information considered for monetary policy decision making. Content Type(s): Publications, Bank of Canada Review articles
Inflation vs Inclusion: Stabilization Policy in the Wake of the Pandemic Staff working paper 2026-13 Felipe Alves, Giovanni L. Violante As the economy emerges from a crisis, macroeconomic policy confronts a dilemma: a protracted stimulus can foster a more inclusive labor market recovery, yet risks igniting inflation that ultimately undermines workers’ welfare through real income erosion. This tension amplifies in the presence of the ZLB and aggregate capacity constraints. We embed this insight into a quantitative model of the US economy. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E24, E3, E31, E32, E5, E52, J, J2, J24, J6, J64 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
Monetary Policy and Government Debt Dynamics Without Commitment Staff working paper 2019-52 Dmitry Matveev I show that maturity considerations affect the optimal conduct of monetary and fiscal policy during a period of government debt reduction. I consider a New Keynesian model and study a dynamic game of monetary and fiscal policy authorities without commitment, characterizing the incentives that drive the choice of interest rate. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E52, E6, E62, E63 Research Theme(s): Financial markets and funds management, Funds management, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
Central Bank Communication That Works: Lessons from Lab Experiments Staff working paper 2019-21 Oleksiy Kryvtsov, Luba Petersen We use controlled laboratory experiments to test the causal effects of central bank communication on economic expectations and to distinguish the underlying mechanisms of those effects. In an experiment where subjects learn to forecast economic variables, we find that central bank communication has a stabilizing effect on individual and aggregate outcomes and that the size of the effect varies with the type of communication. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C9, D, D8, D84, E, E3, E5, E52 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
Price Caps in Canadian Bond Borrowing Markets Staff analytical note 2019-2 Léanne Berger-Soucy, Jean-Sébastien Fontaine, Adrian Walton Price controls, or caps, can lead to shortages, as 1970’s gasoline price controls illustrate. One million trades show that the market for borrowing bonds in Canada has an implicit price cap: traders are willing to pay no more than the overnight interest rate to borrow a bond. This suggests the probability of a shortage increases when interest rates are very low. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G1, G10, G12 Research Theme(s): Financial markets and funds management, Market functioning, Market structure
The Canadian corporate investment gap Staff analytical note 2020-19 Chris D'Souza, Timothy Grieder, Daniel Hyun, Jonathan Witmer Business investment has been lower than expected in Canada and abroad since the financial crisis of 2007–09. This corporate investment gap is mirrored in firms’ other financing decisions, as they have increased cash holdings and dividend payments and decreased issuance of debt and equity. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D2, D22, D9, D92, G, G3, G31, G32 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
Extreme Downside Risk in Asset Returns Staff working paper 2019-46 Lerby Ergun Financial markets can experience sudden and extreme downward movements. Investors are highly concerned about the performance of their assets in such scenarios. Some assets perform badly in a downturn in the market; others have milder reactions. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C14, G, G1, G11, G12 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk