Macroprudential Rules and Monetary Policy when Financial Frictions Matter Staff Working Paper 2012-6 Jeannine Bailliu, Césaire Meh, Yahong Zhang This paper examines the interaction between monetary policy and macroprudential policy and whether policy makers should respond to financial imbalances. To address this issue, we build a dynamic general equilibrium model that features financial market frictions and financial shocks as well as standard macroeconomic shocks. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Financial markets, Financial stability, Monetary policy framework JEL Code(s): E, E4, E42, E5, E50, E6, E60
Bitcoin Awareness and Usage in Canada: An Update Staff Analytical Note 2018-23 Christopher Henry, Kim Huynh, Gradon Nicholls The results of our 2017 Bitcoin Omnibus Survey (December 12 to 15, 2017) when compared with those from 2016 show that Bitcoin “awareness” increased from 64 to 85 per cent, while ownership increased from 2.9 to 5.0 per cent. Most Bitcoin purchasers are using the cryptocurrency as an investment and not as a means of payment for goods or services. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C1, C12, E, E4
Estimating Policy-Neutral Interest Rates for Canada Using a Dynamic Stochastic General-Equilibrium Framework Staff Working Paper 2004-9 Jean-Paul Lam, Greg Tkacz In an era when the primary policy instrument is the level of the short-term interest rate, a comparison of that rate with some equilibrium rate can be a useful guide for policy and a convenient method to measure the stance of monetary policy. Content Type(s): Staff research, Staff working papers Research Topic(s): Interest rates JEL Code(s): C, C3, C32, E, E3, E37
February 21, 2013 Conference Summary: Financial Intermediation and Vulnerabilities Bank of Canada Review - Winter 2012-2013 Jason Allen, James Chapman, Ian Christensen The Bank of Canada’s annual economic conference, held in October 2012, brought together experts from across Canada and around the world to discuss key issues concerning financial intermediation and vulnerabilities. The conference covered such topics as household finances and their relationship to financial stability, as well as bank regulation, securitization and shadow banking. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Central bank research, Financial stability, Financial system regulation and policies JEL Code(s): G, G2
June 23, 2005 Efficiency and Economies of Scale of Large Canadian Banks Financial System Review - June 2005 Jason Allen, Ying Liu Content Type(s): Publications, Financial System Review articles
Estimating DSGE-Model-Consistent Trends for Use in Forecasting Staff Working Paper 2009-35 Jean-Philippe Cayen, Marc-André Gosselin, Sharon Kozicki The workhorse DSGE model used for monetary policy evaluation is designed to capture business cycle fluctuations in an optimization-based format. It is commonplace to log-linearize models and express them with variables in deviation-from-steady-state format. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods JEL Code(s): C, C3, C32, E, E3, E5, E52
China's Exchange Rate Policy: A Survey of the Literature Staff Discussion Paper 2008-5 Robert Lafrance China's integration into the world economy has benefited its people by reducing poverty and raising living standards, and it has benefited the industrialized world by producing manufactured goods at lower cost. It has also raised geopolitical concerns as China's power grows, economic concerns as the manufacturing base in many industrialized countries erodes, and polemics as proposals of protectionist measures to counter China's export growth are put forward. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Exchange rate regimes JEL Code(s): F, F3, F33, F36
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 Research Topic(s): Monetary policy implementation, Monetary policy transmission JEL Code(s): C, C9, D, D8, D84, E, E3, E5, E52
Evaluating the portfolio balance effects of the Government of Canada Bond Purchase Program on the Canadian yield curve Staff Analytical Note 2024-22 Antonio Diez de los Rios The Bank of Canada’s Government of Canada Bond Purchase Program, launched in response to the COVID-19 pandemic, lowered the weighted average maturity of the Government of Canada’s debt by approximately 1.4 years. This in turn reduced Canadian 10-year and 5-year zero-coupon yields by 84 and 52 basis points, respectively. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Asset pricing, Central bank research, Coronavirus disease (COVID-19), Interest rates, Monetary policy JEL Code(s): E, E4, E43, E5, E52, G, G1, G12, H, H6, H63
Real Return Bonds, Inflation Expectations, and the Break-Even Inflation Rate Staff Working Paper 2004-43 Ian Christensen, Christopher Reid, Frédéric Dion According to the Fisher hypothesis, the gap between Canadian nominal and Real Return Bond yields (or break-even inflation rate) should be a good measure of inflation expectations. Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices, Interest rates, Market structure and pricing JEL Code(s): E, E3, E31, E4, E43