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2182 Results

Bank Screening Heterogeneity

Staff working paper 2016-56 Thibaut Duprey
Production efficiency and financial stability do not necessarily go hand in hand. With heterogeneity in banks’ abilities to screen borrowers, the market for loans becomes segmented and a self-competition mechanism arises. When heterogeneity increases, the intensive and extensive margins have opposite effects.
February 21, 2013

The U.S. Recovery from the Great Recession: A Story of Debt and Deleveraging

The U.S. recovery from the Great Recession has been slow relative to other postwar-era recoveries in the United States. Encouraged by loose lending standards in the pre-crisis period, U.S. households took on unsustainable amounts of debt, making them vulnerable to adverse shocks. Subsequently, a considerable drop in asset prices forced households to repair their balance sheets. While there has been progress in household deleveraging, the government sector now needs to delever, which will restrain growth over the next few years.
Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E2, E21, E6, E60

Interbank Asset-Liability Networks with Fire Sale Management

Staff working paper 2020-41 Zachary Feinstein, Grzegorz Halaj
Raising liquidity when funding is stressed creates pressure on the financial market. Liquidating large quantities of assets depresses their prices and may amplify funding shocks. How do banks weathering a funding crisis contribute to contagion risk?

The Extensive Margin of Trade and Monetary Policy

Staff working paper 2018-37 Yuko Imura, Malik Shukayev
This paper studies the effects of monetary policy shocks on firms’ participation in exporting. We develop a two-country dynamic stochastic general equilibrium model in which heterogeneous firms make forward-looking decisions on whether to participate in the export market and prices are staggered across firms and time.

Should Central Banks Worry About Nonlinearities of their Large-Scale Macroeconomic Models?

Staff working paper 2017-21 Vadym Lepetyuk, Lilia Maliar, Serguei Maliar
How wrong could policymakers be when using linearized solutions to their macroeconomic models instead of nonlinear global solutions?

What Drives Interbank Loans? Evidence from Canada

Staff working paper 2018-5 Narayan Bulusu, Pierre Guérin
We identify the drivers of unsecured and collateralized loan volumes, rates and haircuts in Canada using the Bayesian model averaging approach to deal with model uncertainty. Our results suggest that the key friction driving behaviour in this market is the collateral reallocation cost faced by borrowers.

Reconciling Jaimovich-Rebelo Preferences, Habit in Consumption and Labor Supply

Staff working paper 2018-26 Tom D. Holden, Paul Levine, Jonathan Swarbrick
This note studies a form of a utility function of consumption with habit and leisure that (a) is compatible with long-run balanced growth, (b) hits a steady-state observed target for hours worked and (c) is consistent with micro-econometric evidence for the inter-temporal elasticity of substitution and the Frisch elasticity of labor supply.

Parallel Tempering for DSGE Estimation

Staff working paper 2024-13 Joshua Brault
I develop a population-based Markov chain Monte Carlo algorithm known as parallel tempering to estimate dynamic stochastic general equilibrium models. Parallel tempering approximates the posterior distribution of interest using a family of Markov chains with tempered posteriors.

Information Sharing and Bargaining in Buyer-Seller Networks

Staff working paper 2016-63 Sofia Priazhkina, Frank H. Page
This paper presents a model of strategic buyer-seller networks with information exchange between sellers. Prior to engaging in bargaining with buyers, sellers can share access to buyers for a negotiated transfer. We study how this information exchange affects overall market prices, volumes and welfare, given different initial market conditions and information sharing rules.
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