Financial Frictions, Durable Goods and Monetary Policy Staff Working Paper 2019-31 Ugochi Emenogu, Leo Michelis Financial frictions affect how much consumers spend on durable and non-durable goods. Borrowers can face both loan-to-value (LTV) constraints and payment-to-income (PTI) constraints. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial system regulation and policies, Monetary policy JEL Code(s): E, E4, E44, E5, E52
Bending the Curves: Wages and Inflation Staff Analytical Note 2018-15 Dany Brouillette, Madigan Dockrill, Helen Lao, Laurence Savoie-Chabot As economic slack continues to be absorbed and the labour market tightens, wage growth and inflation could increase faster than expected, which would suggest convexity in their Phillips curves. This note investigates whether there is convexity in the Phillips curves for Canadian wage growth and inflation by testing different empirical approaches over the post-inflation-targeting period. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Inflation and prices, Labour markets JEL Code(s): E, E2, E24, E3, E31, J, J3
May 17, 2012 On the Adjustment of the Global Economy Bank of Canada Review - Spring 2012 Carlos De Resende, Claudia Godbout, René Lalonde, Eric Morin, Nikita Perevalov This article discusses three scenarios for the adjustment of the global economy. In a “baseline” scenario—which encompasses fiscal consolidation in major advanced economies, growth-friendly structural reforms in Europe and Japan, and greater exchange rate flexibility and reforms in the emerging-market economies of Asia to induce rotation of demand away from net exports—global current account imbalances […] Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Balance of payments and components, Exchange rates, Fiscal policy, International topics, Recent economic and financial developments JEL Code(s): F, F3, F32, F37, F4, F42
Macroeconomic Experiences and Risk Taking of Euro Area Households Staff Working Paper 2014-10 Miguel Ampudia, Michael Ehrmann This paper studies to what extent the experiences of households shape their willingness to take financial risks. It follows the methodology of Malmendier and Nagel (2011) and applies it to a novel data set on household finances covering euro area households. Content Type(s): Staff research, Staff working papers Research Topic(s): Sectoral balance sheet JEL Code(s): D, D0, D03, D1, D14, D8, D83, G, G1, G11
A Structural Error-Correction Model of Best Prices and Depths in the Foreign Exchange Limit Order Market Staff Working Paper 2006-8 Ingrid Lo, Stephen Sapp Traders using the electronic limit order book in the foreign exchange market can watch the posted price and depth of the best quotes change over the day. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates, Financial markets JEL Code(s): C, C3, D, D8, F, F3, F31
Expansion of Higher Education, Employment and Wages: Evidence from the Russian Transition Staff Working Paper 2013-45 Natalia Kyui This paper analyzes the effects of an educational system expansion on labour market outcomes, drawing upon a 15-year natural experiment in the Russian Federation. Regional increases in student intake capacities in Russian universities, a result of educational reforms, provide a plausibly exogenous variation in access to higher education. Content Type(s): Staff research, Staff working papers Research Topic(s): Development economics, Labour markets JEL Code(s): I, I2, I20, J, J2, J24
A Structural Small Open-Economy Model for Canada Staff Working Paper 2004-4 Stephen Murchison, Andrew Rennison, Zhenhua Zhu The authors develop a small open-economy dynamic stochastic general-equilibrium (DSGE) model in an attempt to understand the dynamic relationships in Canadian macroeconomic data. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Economic models, Inflation and prices JEL Code(s): E, E2, E3, E5, E52
Productivity, the Terms of Trade, and the Real Exchange Rate: The Balassa-Samuelson Hypothesis Revisited Staff Working Paper 2009-22 Ehsan U. Choudhri, Lawrence L. Schembri The paper examines how the Balassa-Samuelson hypothesis is affected by a modern variation of the standard model that allows product differentiation (within the traded and nontraded goods sectors) with the number of firms determined exogenously or endogenously. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates, Productivity JEL Code(s): F, F3, F31, F4, F41
Potential output and the neutral rate in Canada: 2021 update Staff Analytical Note 2021-6 Dany Brouillette, Guyllaume Faucher, Martin Kuncl, Austin McWhirter, Youngmin Park We expect potential output growth to be higher than in the October 2020 reassessment. By 2024, growth will be slightly above its average growth from 2010 to 2019. We assess that the Canadian nominal neutral rate continues to lie in the range of 1.75 to 2.75 percent. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Economic models, Interest rates, Labour markets, Monetary policy, Potential output, Productivity JEL Code(s): E, E2, E23, E24, E3, E37, E4, E43, E5, E52
From Micro to Macro Hysteresis: Long-Run Effects of Monetary Policy Staff Working Paper 2024-39 Felipe Alves, Giovanni L. Violante We explore the long-run effects of a monetary policy shock in a Heterogeneous Agent New Keynesian model built on the micro evidence that job losses lead to persistently lower individual earnings through a combination of skill decay and abandonment of the labour force. Content Type(s): Staff research, Staff working papers Research Topic(s): Labour markets, Monetary policy transmission JEL Code(s): E, E2, E21, E24, E3, E31, E32, E5, E52, J, J2, J24, J6, J64