Monetary Policy Transmission to Small Business Loan Performance: Evidence from Loan-Level Data Staff working paper 2024-41 Rodrigo Sekkel, Tamon Takamura, Yaz Terajima We analyze the dynamic and heterogeneous responses of small-business loan performance to a monetary-policy shock using loan-level data in Canada. We find evidence of monetary policy transmission through the cash-flow channel and the aggregate demand channel as well as some, though limited, impact of collateral to discipline loan repayment. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C32, E, E1, E17, E3, E37, E5, E52 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission
Downward Nominal Wage Rigidity in Canada: Evidence Against a “Greasing Effect” Staff working paper 2017-31 Joel Wagner The existence of downward nominal wage rigidity (DNWR) has often been used to justify a positive inflation target. It is traditionally assumed that positive inflation could “grease the wheels” of the labour market by putting downward pressure on real wages, easing labour market adjustments during a recession. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E24, E5, E52 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
December 10, 2007 Inflation Targeting, Price-Level Targeting, and Fluctuations in Canada's Terms of Trade Bank of Canada Review - Winter 2007-2008 Donald Coletti, René Lalonde Coletti and Lalonde compare inflation targeting and price-level targeting in the context of a small open economy subject to sizable terms-of-trade shocks. The authors summarize recent research that compares the ability of price-level targeting and inflation targeting to stabilize the macroeconomy when confronted with shocks similar to those experienced by Canada in recent years. Their preliminary results suggest that price-level targeting may represent a feasible alternative to traditional inflation targeting. Their article also provides insight into the direction of current research in this area at the Bank. Content Type(s): Publications, Bank of Canada Review articles
Untapped Potential: Mobile Device Ownership and Mobile Payments in Canada Staff working paper 2024-25 Marie-Hélène Felt, Angelika Welte, Katrina Talavera We present a two-stage model of mobile phone and mobile payment usage that controls for selectivity. This reveals unobserved factors that work against having a mobile phone and toward mobile paying. Therefore, people who are unable to acquire or choose not to own a mobile device might have unmet payment needs. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C39, D, D1, D12, E, E4, E42 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Digital assets and fintech, Retail payments
The impact of a central bank digital currency on payments at the point of sale Staff analytical note 2024-27 Walter Engert, Oleksandr Shcherbakov, André Stenzel We simulate the impact of a central bank digital currency (CBDC) on consumer adoption, merchant acceptance and use of different payment methods. Modest frictions that deter consumer adoption of a CBDC inhibit its market penetration. Minor pricing responses by financial institutions and payment service providers further reduce the impact of a CBDC. Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C5, C51, D, D1, D12, E, E4, E42, L, L1, L14, L5, L52 Research Theme(s): Money and payments, Digital assets and fintech, Retail payments
Dating Systemic Financial Stress Episodes in the EU Countries Staff working paper 2016-11 Benjamin Klaus, Tuomas Peltonen, Thibaut Duprey This paper introduces a new methodology to date systemic financial stress events in a transparent, objective and reproducible way. The financial cycle is captured by a monthly country-specific financial stress index. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C54, G, G0, G01, G1, G15 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Econometric, statistical and computational methods
Challenges in Implementing Worst-Case Analysis Staff working paper 2018-47 Jon Danielsson, Lerby Ergun, Casper G. de Vries Worst-case analysis is used among financial regulators in the wake of the recent financial crisis to gauge the tail risk. We provide insight into worst-case analysis and provide guidance on how to estimate it. We derive the bias for the non-parametric heavy-tailed order statistics and contrast it with the semi-parametric extreme value theory (EVT) approach. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C0, C01, C1, C14, C5, C58 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Econometric, statistical and computational methods
The Welfare Effects of Protection: A General Equilibrium Analysis of Canada’s National Policy Staff working paper 2017-18 Patrick Alexander, Ian Keay In this paper, we study the impact of Canada’s adoption of protectionist trade policy in 1879 on Canadian welfare. Under the National Policy the Canadian average weighted tariff increased from 14% to 21%. The conventional view is that this was a distortionary policy that negatively affected Canadian welfare. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F1, F13, F14, F4, F42, F6, F60, N, N7, N71 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness
Global Demand and Supply Sentiment: Evidence from Earnings Calls Staff working paper 2023-37 Temel Taskin, Franz Ulrich Ruch This paper quantifies global demand, supply and uncertainty shocks and compares two major global recessions: the 2008–09 Great Recession and the COVID-19 pandemic. We use two alternate approaches to decompose economic shocks: text mining techniques on earnings calls transcripts and a structural Bayesian vector autoregression model. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C11, C3, C32, E, E3, E32, G, G1, G10 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
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