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2190 Results

Volatility Risk and Economic Welfare

Staff working paper 2017-20 Shaofeng Xu
This paper examines the effects of time-varying volatility on welfare. I construct a tractable endogenous growth model with recursive preferences, stochastic volatility, and capital adjustment costs.

Estimating the Costs of Electronic Retail Payment Networks: A Cross-Country Meta Analysis

Staff discussion paper 2025-17 Cam Donohoe, Youming Liu
We explore how many electronic funds transfer (EFT) systems can viably coexist within a jurisdiction at efficient scale by estimating the cost curve of the average EFT. We estimate the marginal cost to be approximately $0.55 per transaction, and the fixed cost to be approximately $83 million per year.

Starting from a Blank Page? Semantic Similarity in Central Bank Communication and Market Volatility

Staff working paper 2016-37 Michael Ehrmann, Jonathan Talmi
Press releases announcing and explaining monetary policy decisions play a critical role in the communication strategy of central banks. Because of their market-moving potential, it is particularly important how they are drafted. Often, central banks start from the previous statement and update the earlier text with only small changes.

Beyond the averages: Measuring underlying wage growth using Labour Force Survey microdata

Staff analytical note 2024-23 Fares Bounajm, Tessa Devakos, Gabriela Galassi
When it comes to understanding the influence of labour costs on inflation, average wage growth is a misleading indicator because it is affected by composition effects. We propose an alternative measure that corrects for these effects by using microdata from the Labour Force Survey. Our new measure has many desirable properties, including reduced volatility and a better relationship with labour market fundamentals.
August 18, 2002

The Role of Simple Rules in the Conduct of Canadian Monetary Policy

The third strategy employed by the Bank when dealing with uncertainty is the consideration of appropriate simple reaction functions or "rules" for the setting of the policy interest rate. Since John Taylor's presentation of his much-discussed rule, research on simple policy rules has exploded. Simple rules have several advantages. In particular, they are easy to construct and communicate and are believed by some to be robust, in the sense of generating good results in a variety of economic models. This article provides an overview of the recent research regarding the usefulness and robustness of simple monetary policy rules, particularly in models of the Canadian economy. It also describes and explains the role of simple rules in the conduct of monetary policy in Canada.

The Distributional Effects of Conventional Monetary Policy and Quantitative Easing: Evidence from an Estimated DSGE Model

Staff working paper 2019-6 Stefan Hohberger, Romanos Priftis, Lukas Vogel
This paper compares the distributional effects of conventional monetary policy and quantitative easing (QE) within an estimated open-economy DSGE model of the euro area.

Assessing global potential output growth: April 2024

This note presents the annual update of Bank of Canada staff estimates for growth in global potential output. These estimates serve as key inputs to the analysis supporting the April 2024 Monetary Policy Report.
April 7, 2009

Price-Level Uncertainty, Price-Level Targeting, and Nominal Debt Contracts

Many central banks around the world have embraced inflation targeting as a monetary policy framework. Interest is growing, however, in price-level targeting as an alternative. The choice of frameworks has important consequences for financial contracts, most of which are not fully indexed to the price level. Changes in the price level therefore lead to changes in the real value of contracts.
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