February 23, 2012 Household Borrowing and Spending in Canada Bank of Canada Review - Winter 2011-2012 Jeannine Bailliu, Katya Kartashova, Césaire Meh Understanding how much of the increased debt load of Canadian households has been used to finance household spending on consumption and home renovation is important for the conduct of monetary policy. In this article, the authors use a comprehensive data set that provides information on the uses of debt by Canadian households. They first present some facts regarding the evolution of Canadian household debt over the period from 1999 to 2010, emphasizing the increased importance of debt flows that are secured by housing. They then explore how Canadian households have used their borrowed funds over the same period, and assess the role of these borrowed funds in financing total consumption and spending on home renovation. Finally, they examine the possible effects of a decline in house prices on consumption when housing equity is used as collateral against household indebtedness. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E2, E21, E5, E51, H, H3, H31
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
A Counterfactual Valuation of the Stock Index as a Predictor of Crashes Staff working paper 2017-38 Tom Roberts Stock market fundamentals would not seem to meaningfully predict returns over a shorter-term horizon—instead, I shift focus to severe downside risk (i.e., crashes). Content Type(s): Staff research, Staff working papers JEL Code(s): G, G0, G01, G1, G12, G17, G19 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk
November 18, 2010 Financial Stress, Monetary Policy, and Economic Activity Bank of Canada Review - Autumn 2010 Fuchun Li, Pierre St-Amant The recent global crisis was characterized by a remarkable intensity in the negative feedback process between financial sector developments and the real economy. Content Type(s): Publications, Bank of Canada Review articles
May 21, 2004 Are Wealth Effects Important for Canada? Bank of Canada Review - Spring 2004 Lise Pichette Some analysts believe that a sharp rise in equity values was an important factor in the strong consumer spending between 1995 and 2000. Empirical evidence suggests, however, that consumer spending responds more to changes in housing wealth than it does to equity wealth. Content Type(s): Publications, Bank of Canada Review articles
December 13, 2007 Central Bank Performance under Inflation Targeting Bank of Canada Review - Winter 2007-2008 Marc-André Gosselin Gosselin examines and reports on the various factors that contribute to successful inflation targeting. Using a panel of 21 inflation-targeting countries over the period 1990Q1-2007Q2, Gosselin finds that the ability of central banks to hit their targets varies considerably. Some of these differences can be explained by exchange rate fluctuations, fiscal deficits, and differences in financial development. Others are explained by differences in the targeting framework itself and the manner in which it is implemented. Content Type(s): Publications, Bank of Canada Review articles
February 17, 2011 Payment Networks: A Review of Recent Research Bank of Canada Review - Winter 2010-2011 James Chapman, Lana Embree, Tom Roberts, Nellie Zhang In this article, the authors review work done at the Bank of Canada and at other central banks with the relatively new application of network analysis to the study of payments systems. Content Type(s): Publications, Bank of Canada Review articles
September 7, 2012 Dutch Disease Remarks Mark Carney Spruce Meadows Round Table Calgary, Alberta Governor Mark Carney discusses the impact of high commodity prices for the Canadian economy. Content Type(s): Press, Speeches and appearances, Remarks
Global Real Activity for Canadian Exports: GRACE Staff discussion paper 2017-2 André Binette, Tony Chernis, Daniel de Munnik Canadian exports have often disappointed since the Great Recession. The apparent disconnect between exports and the Bank of Canada’s current measure of foreign demand has created an impetus to search for an alternative. Content Type(s): Staff research, Staff discussion papers JEL Code(s): F, F1, F10, F14, F4, F43 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness
Assessing global potential output growth and the US neutral rate: April 2023 Staff analytical note 2023-5 Salma Ahmed, Aviel Avshalumov, Tania Chaar, Eshini Ekanayake, Helen Lao, Louis Poirier, Jenna Rolland-Mills, Argyn Toktamyssov, Lin Xiang We expect global potential output growth to increase from 2.5% in 2022 to 2.8% by 2026. Compared with the April 2022 staff assessment, global potential output growth is marginally slower. The current range for the US neutral rate is 2% to 3%, unchanged from the last annual assessment. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E1, E2, E4, E5, F, F0, O, O4 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply