Fixed-income dealing and central bank interventions Staff analytical note 2022-9 David Cimon, Adrian Walton We summarize the theoretical model of central bank asset purchases developed in Cimon and Walton (2022). The model helps us understand how asset purchases ease pressures on investment dealers to restore market conditions in a crisis. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G1, G10, G2, G20, L, L1, L10 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Models and tools, Economic models, Monetary policy, Monetary policy tools and implementation
Firm-Specific Shocks and Aggregate Fluctuations Staff working paper 2016-51 Leonid Karasik, Danny Leung, Ben Tomlin In order to understand what drives aggregate fluctuations, many macroeconomic models point to aggregate shocks and discount the contribution of firm-specific shocks. Recent research from other developed countries, however, has found that aggregate fluctuations are in part driven by idiosyncratic shocks to large firms. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E22, E23, E24, E3, L, L6 Research Theme(s): Financial markets and funds management, Market structure, Monetary policy, Real economy and forecasting
June 21, 2006 Credibility with Flexibility: The Evolution of Inflation-Targeting Regimes, 1990–2006 Bank of Canada Review - Summer 2006 Graydon Paulin Beginning with a review of the adoption of inflation targeting in a broad group of countries, Paulin focuses on changes in the design of inflation-targeting frameworks in light of fifteen years of accumulated experience. Included in the discussion are the use of numerical targets and ranges, the policy horizon, supporting institutional policy structures, and communication, including the publication of forecasts. A recurring theme is how much flexibility an inflation-targeting regime allows. The article concludes that the changes made to the frameworks have been relatively modest since their adoption, but in concert with the improved credibility that has resulted from central banks meeting their inflation-control targets, they have allowed an increasingly nuanced response to economic shocks. Content Type(s): Publications, Bank of Canada Review articles
Can Media and Text Analytics Provide Insights into Labour Market Conditions in China? Staff working paper 2018-12 Jeannine Bailliu, Xinfen Han, Mark Kruger, Yu-Hsien Liu, Sri Thanabalasingam The official Chinese labour market indicators have been seen as problematic, given their small cyclical movement and their only-partial capture of the labour force. In our paper, we build a monthly Chinese labour market conditions index (LMCI) using text analytics applied to mainland Chinese-language newspapers over the period from 2003 to 2017. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C38, C5, C55, E, E2, E24, E27 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
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
Limiting Sender’s Information in Bayesian Persuasion Staff working paper 2019-10 Shota Ichihashi This paper studies how the outcome of Bayesian persuasion depends on a sender’s information. I study a game in which, prior to the sender’s information disclosure, the designer can restrict the most informative signal that the sender can generate. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D8, D82, D83 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission
A Bitcoin Standard: Lessons from the Gold Standard Staff working paper 2016-14 Warren E. Weber This paper imagines a world in which countries are on the Bitcoin standard, a monetary system in which all media of exchange are Bitcoin or are backed by it. The paper explores the similarities and differences between the Bitcoin standard and the gold standard and describes the media of exchange that would exist under the Bitcoin standard. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E41, E42, E5, E58 Research Theme(s): Financial markets and funds management, International markets and currencies, Monetary policy, Monetary policy framework and transmission, Money and payments, Digital assets and fintech
December 10, 2013 Assessing the Systemic Importance of Financial Institutions Financial System Review - December 2013 Éric Chouinard, Erik Ens Content Type(s): Publications, Financial System Review articles
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. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E43, E5, E52, E58 Research Theme(s): Financial markets and funds management, Market functioning, Monetary policy, Monetary policy framework and transmission