The Safety of Government Debt Staff Working Paper 2013-34 Kartik Anand, Prasanna Gai We examine the safety of government bonds in the presence of Knightian uncertainty amongst financial market participants. In our model, the information insensitivity of government bonds is driven by strategic complementarities across counterparties and the structure of trading relationships. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Financial stability, International financial markets JEL Code(s): D, D8, D81, E, E4, E44, F, F0, F02, F4, F41, G, G1, G15
External Stability, Real Exchange Rate Adjustment and the Exchange Rate Regime in Emerging-Market Economies Staff Discussion Paper 2011-5 Olivier Gervais, Lawrence L. Schembri, Lena Suchanek In emerging-market economies, real exchange rate adjustment is critical for maintaining a sustainable current account position and thereby for helping to reduce macroeconomic and financial instability. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Development economics, Exchange rate regimes, International topics JEL Code(s): F, F3, F31, F32, F4, F41
State-Dependent or Time-Dependent Pricing: Does It Matter for Recent U.S. Inflation? Staff Working Paper 2005-4 Peter J. Klenow, Oleksiy Kryvtsov Inflation equals the product of two terms: an extensive margin (the fraction of items with price changes) and an intensive margin (the average size of those changes). Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices JEL Code(s): E, E3, E31, E32
Forward Guidance at the Effective Lower Bound: International Experience Staff Discussion Paper 2015-15 Karyne B. Charbonneau, Lori Rennison Forward guidance is one of the policy tools that a central bank can implement if it seeks to provide additional monetary stimulus when it is operating at the effective lower bound (ELB) on interest rates. It became more widely used during and after the global financial crisis. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Monetary policy and uncertainty, Monetary policy communications, Monetary policy framework, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E4, E43, E5, E52, E58, E6
Incentive Compatibility on the Blockchain Staff Working Paper 2018-34 Jonathan Chiu, Thorsten Koeppl A blockchain is a digital ledger that keeps track of a record of ownership without the need for a designated party to update and enforce changes to the record. The updating of the ledger is done directly by the users of the blockchain and is traditionally governed by a proof-of-work (PoW) protocol. Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Economic models, Payment clearing and settlement systems JEL Code(s): G, G2, H, H4, P, P4, P43
The Effects of Economic News on Bond Market Liquidity Staff Working Paper 2004-16 Chris D'Souza, Charles Gaa The authors contrast the impact of two sources of information flow on the volatility of prices, trading activity, and liquidity in the brokered interdealer market for Government of Canada bonds. Content Type(s): Staff research, Staff working papers Research Topic(s): Debt management, Financial markets, Market structure and pricing JEL Code(s): G, G1, G14
A Comprehensive Evaluation of Measures of Core Inflation for Canada Staff Discussion Paper 2015-12 Mikael Khan, Louis Morel, Patrick Sabourin This paper evaluates the usefulness of various measures of core inflation for the conduct of monetary policy. Traditional exclusion-based measures of core inflation are found to perform relatively poorly across a range of evaluation criteria, in part due to their inability to filter unanticipated transitory shocks. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Inflation and prices, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52
Monetary Policy Independence and the Strength of the Global Financial Cycle Staff Working Paper 2020-25 Christian Friedrich, Pierre Guérin, Danilo Leiva-Leon We propose a new strength measure of the global financial cycle by estimating a regime-switching factor model on cross-border equity flows for 61 countries. We then assess how the strength of the global financial cycle affects monetary policy independence, which is defined as the response of central banks' policy interest rates to exogenous changes in inflation. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Exchange rate regimes, Financial system regulation and policies, International financial markets, Monetary policy JEL Code(s): E, E4, E5, F, F3, F32, F4, F42, G, G1, G15, G18
2020 US Neutral Rate Assessment Staff Discussion Paper 2020-12 James Bootsma, Thomas J. Carter, Xin Scott Chen, Christopher Hajzler, Argyn Toktamyssov This paper presents Bank of Canada staff’s current assessment of the US neutral rate, along with a newly developed set of models on which that assessment is based. The overall assessment is that the US neutral rate currently lies in a range of 1.75 to 2.75 percent. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41
An Empirical Investigation into Government Spending and Private Sector Behaviour Staff Working Paper 1994-8 Robert Amano, Tony S. Wirjanto We examine whether there is a significant relationship between government and private consumption for Canada. We derive estimating equations between the two types of consumption under both cointegration and no-cointegration assumptions. Content Type(s): Staff research, Staff working papers Research Topic(s): Recent economic and financial developments