On the Fragility of DeFi Lending Staff working paper 2023-14 Jonathan Chiu, Emre Ozdenoren, Kathy Yuan, Shengxing Zhang We develop a dynamic model to capture key features of decentralized finance lending. We identify a price-liquidity feedback: the market outcome in any given period depends on agents' expectations about lending activities in future periods, with higher future price expectations leading to more lending and higher prices in that period. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G0, G01, G1, G10 Research Theme(s): Financial system, Financial stability and systemic risk, Money and payments, Digital assets and fintech
December 21, 2008 The Role of Bank Capital in the Propagation of Shocks Financial System Review - December 2008 Césaire Meh, Kevin Moran Content Type(s): Publications, Financial System Review articles
June 22, 2011 Emerging from the Shadows: Market-Based Financing in Canada Financial System Review - June 2011 James Chapman, Lawrence L. Schembri, Stéphane Lavoie Content Type(s): Publications, Financial System Review articles
Optimal Interbank Regulation Staff working paper 2017-48 Thomas J. Carter Recent years have seen renewed interest in the regulation of interbank markets. A review of the literature in this area identifies two gaps: first, the literature has tended to make ad hoc assumptions about the interbank contract space, which makes it difficult to generate convincing policy prescriptions; second, the literature has tended to focus on ex-post interventions that kick in only after an interbank disruption has come underway (e.g., open-market operations, lender-of-last-resort interventions, bail-outs), rather than ex-ante prudential policies. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G0, G01, G2, G20 Research Theme(s): Financial system, Financial stability and systemic risk, Financial system regulation and oversight
High-Frequency Cross-Sectional Identification of Military News Shocks Staff working paper 2025-27 Francesco Amodeo, Edoardo Briganti We identify and quantify fiscal news shocks, compiling events (2001–2023) that altered the expected path of U.S. defense expenditure. For each event, we estimate market-implied shifts in expected spending. A shift-share analysis yields a two-year, metropolitan statistical area–level GDP multiplier of approximately 1 for U.S. military build-ups. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E20, E3, E30, E32, E6, E60, E62, E65 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
October 25, 2005 Bank of Canada Review - Autumn 2005 Cover page Ready References The book is part of the National Currency Collection, Bank of Canada. Photography by Gord Carter, Ottawa. Content Type(s): Publications, Bank of Canada Review
The Bank of Canada’s “Horse Race” of Alternative Monetary Policy Frameworks: Some Interim Results from Model Simulations Staff discussion paper 2021-13 José Dorich, Rhys R. Mendes, Yang Zhang Bank of Canada staff are running a “horse race” of alternative monetary policy frameworks in the lead-up to 2021 renewal of the Bank’s monetary policy framework. This paper summarizes some interim results of model simulations from their research. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E2, E27, E3, E4, E5, E52, E58 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission
The Impact of a Trade War: Assessment of the Current Tariffs and Alternative Scenarios Staff analytical note 2019-20 Karyne B. Charbonneau This note uses Charbonneau and Landry’s (2018) framework to assess the direct impact of the current trade tensions on the Canadian and global economies, as well as possible implications if the conflict escalates further. Overall, my findings show that the estimated impact of current tariffs on real gross domestic product (GDP) remains relatively small, which is in line with the literature on gains from trade, but the impact on trade is much larger. Content Type(s): Staff research, Staff analytical notes JEL Code(s): F, F1, F11, F13, F14, F15, F5, F50, F6, F62, F68 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness
Potential netting benefits from expanded central clearing in Canada’s fixed-income market Staff analytical note 2022-8 Jessie Ziqing Chen, Johannes Chen, Shamarthi Ghosh, Manu Pandey, Adrian Walton We assess whether more central clearing would enhance the resilience of Canadian fixed-income markets. Our analysis estimates the potential benefits of balance sheet netting under scenarios where central clearing is expanded to new participants. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D4, G, G1, G12, G2, G21, G29 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Money and payments, Payment and financial market infrastructures
Are Working Hours Complements in Production? Staff working paper 2022-47 Lin Shao, Faisal Sohail, Emircan Yurdagul Using Canadian matched employer-employee data, we show that working hours of different workers are gross complements in production rather than perfect substitutes, as is typically assumed by macroeconomic models of production. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E23, J, J2, J22, J23, J3, J31 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply