Tariffs and the Exchange Rate: Evidence from Twitter Staff working paper 2021-36 Dmitry Matveev, Francisco Ruge-Murcia Do tariffs affect exchange rates? We look at President Trump’s tweets during talks on the North American Free Trade Agreement and find that anticipation of higher tariffs on imports from Canada and Mexico led to an appreciation of the US dollar relative to Canadian and Mexican currency. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F1, F13, F3, F31 Research Theme(s): Financial markets and funds management, International markets and currencies, Structural challenges, International trade, finance and competitiveness
April 7, 2009 Price-Level Uncertainty, Price-Level Targeting, and Nominal Debt Contracts Bank of Canada Review - Spring 2009 Allan Crawford, Césaire Meh, Yaz Terajima 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. Content Type(s): Publications, Bank of Canada Review articles
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
Trade and Market Power in Product and Labor Markets Staff working paper 2021-17 Gaelan MacKenzie Trade liberalizations increase the sales and input purchases of productive firms relative to their less productive domestic competitors. This reallocation affects firms’ market power in their product and input markets. I quantify how the labour market power of employers affects the distribution and size of the gains from trade. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D4, D43, F, F1, F12, F6, J, L, L1, L13 Research Theme(s): Financial markets and funds management, Market structure, Structural challenges, International trade, finance and competitiveness
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. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, E5, E52, F, F4, F41 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
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
Central Bank Digital Currency and Monetary Policy Staff working paper 2018-36 Mohammad Davoodalhosseini Many central banks are contemplating whether to issue central bank digital currency. This piece explores the implications as well as potential motivators of such a step. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E42, E5, E50 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Money and payments, Digital assets and fintech
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
December 23, 2005 The Use of Microdata to Assess Risks in the Non-Financial Corporate Sector Financial System Review - December 2005 Meyer Aaron, Dylan Hogg Content Type(s): Publications, Financial System Review articles
Portfolio Rebalancing Channel and the Effects of Large-Scale Stock and Bond Purchases Staff working paper 2025-38 Sami Alpanda, Serdar Kabaca We quantify the effects of large-scale stock purchases by a central bank and compare these to bond purchases. We find that the central bank’s equity purchases would lower the risk and term premiums on stocks and long-term bonds, respectively, and thereby stimulate economic activity. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E4, E44, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting