December 23, 2004 Basel II and Required Bank Capital Financial System Review - December 2004 Mark Illing, Graydon Paulin Content Type(s): Publications, Financial System Review articles
February 23, 2012 Medium-Term Fluctuations in Canadian House Prices Bank of Canada Review - Winter 2011-2012 Brian Peterson, Yi Zheng This article draws on theory and empirical evidence to examine a number of factors behind movements in Canadian house prices. It begins with an overview of the movements in house prices in Canada, using regional data to highlight factors that influence prices over the long run. It then turns to the central theme, that there are medium-run movements in prices not accounted for by long-run factors. Drawing on recent Bank of Canada research, the article discusses several factors behind these medium-run movements, including interest rates, expected price appreciation and market liquidity. The article concludes by identifying areas for future research that would further our understanding of fluctuations in house prices. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): R, R2, R21, R3, R31
Consumer Credit with Over-optimistic Borrowers Staff working paper 2020-57 Florian Exler, Igor Livshits, James (Jim) C. MacGee, Michèle Tertilt When lenders cannot directly identify behavioural and rational borrowers, they use type scoring to track the likelihood of a borrower’s type. This leads to the partial pooling of borrowers, which results in rational borrowers subsidizing borrowing costs for behavioural borrowers. This, in turn, reduces the effectiveness of regulatory policies that target mistakes by behavioural borrowers. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E4, E49, G, G1, G18, K, K3, K35 Research Theme(s): Financial system, Financial stability and systemic risk, Financial system regulation and oversight, Household and business credit, Monetary policy, Monetary policy framework and transmission
Making It Real: Bringing Research Models into Central Bank Projections Staff discussion paper 2023-29 Marc-André Gosselin, Sharon Kozicki Macroeconomic projections and risk analyses play an important role in guiding monetary policy decisions. Models are integral to this process. This paper discusses how the Bank of Canada brings research models and lessons learned from those models into the central bank projection environment. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C3, C32, C5, C51, E, E3, E37, E4, E47, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
Assessing global potential output growth and the US neutral rate: April 2022 Staff analytical note 2022-4 Kyle Boutilier, Thomas J. Carter, Xin Scott Chen, Eshini Ekanayake, Louis Poirier, Peter Shannon, Akash Uppal, Lin Xiang We expect global potential output growth to increase from 2.7% in 2021 to 2.9% by 2024. Compared with the April 2021 assessment, global potential output growth is marginally slower. The current range for the US neutral rate is 2% to 3%, 0.25 percentage points higher than staff’s last assessment. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E1, E2, E4, E5, F, F0, O, O4 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
2018 Bitcoin Omnibus Survey: Awareness and Usage Staff discussion paper 2019-10 Christopher Henry, Kim Huynh, Gradon Nicholls, Mitchell Nicholson The Bank of Canada continues to use the Bitcoin Omnibus Survey (BTCOS) to monitor trends in Canadians’ awareness, ownership and use of Bitcoin. The most recent iteration was conducted in late 2018, following an 85 percent decline in the price of Bitcoin throughout the year. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C1, C12, E, E4, O, O5, O51 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech
Assessing the Impact of Demographic Composition on Productivity Staff discussion paper 2025-3 Justin-Damien Guénette, Lin Shao We examine how demographic factors influence potential output, focusing on how the age distribution of the working-age population and the old-age dependency ratio affect aggregate productivity. Following Feyrer (2007), we emphasize that the contribution to aggregate productivity varies by age group, with middle-aged individuals (aged 40 to 49) being the most productive. Content Type(s): Staff research, Staff discussion papers JEL Code(s): J, J1, J11, O, O4, O47, O5, O51 Research Theme(s): Structural challenges, Demographics and labour supply, Digitalization and productivity
June 9, 2010 Crude Oil Futures: A Crystal Ball? Bank of Canada Review - Spring 2010 Ron Alquist, Elif Arbatli Based on recent research, this article discusses three ways that oil-futures prices can improve our understanding of current conditions and future prospects in the global market for crude oil. First, the response of the oil-futures curve can be used to identify the persistence of oil-price shocks and to obtain an indicator of the rate at which they will diminish. Second, the spread between the current futures price and the spot price of oil can be interpreted as an indicator of the precautionary demand for oil. Third, because oil-futures prices are volatile, forecasts of the future spot price of oil using futures prices should be supplemented with other information to improve their accuracy. Content Type(s): Publications, Bank of Canada Review articles
The COVID-19 Consumption Game-Changer: Evidence from a Large-Scale Multi-Country Survey Staff working paper 2021-57 Alexander Hodbod, Cars Hommes, Stefanie J. Huber, Isabelle Salle A multi-country consumer survey investigates why and how much households decreased their consumption in five key sectors after pandemic-related restrictions were lifted in Europe in July 2020. Beyond infection risk and precautionary saving motives, households also reported not missing some consumption items, which may indicate preference shifts and structural changes in the post-COVID-19 economy. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, D12, D8, D81, D84, E, E2, E21, E6, E60, E7, E71 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
Corporate investment and monetary policy transmission in Canada Staff analytical note 2020-26 Min Jae Kim, Jonathan Witmer Unexpected changes in interest rates lead small firms to materially change their investment rate. Large firms, in contrast, show a smaller response. This suggests both that financial conditions are an important channel for transmitting monetary policy and that firm characteristics can help us better understand fluctuations in business investment. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D2, D22, D9, D92, G, G3, G31, G32 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission