Estimating the Portfolio-Balance Effects of the Bank of Canada’s Government of Canada Bond Purchase Program Staff working paper 2024-34 Antonio Diez de los Rios Using a novel dynamic portfolio balance model of the yield curve for Government of Canada bonds, I find that the Bank of Canada’s Government of Canada Bond Purchase Program reduced Canadian 10-year and 5-year zero-coupon yields by 84 and 52 basis points, respectively. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E43, E5, E52, G, G1, G12, H, H6, H63 Research Theme(s): Financial markets and funds management, Market functioning, Models and tools, Economic models, Monetary policy, Monetary policy tools and implementation
House Price Responses to Monetary Policy Surprises: Evidence from the U.S. Listings Data Staff working paper 2022-39 Denis Gorea, Oleksiy Kryvtsov, Marianna Kudlyak Existing literature documents that house prices respond to monetary policy surprises with a significant delay, taking years to reach their peak response. We present new evidence of a much faster response. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E52, R, R2, R21, R3, R31 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission
Understanding Monetary Policy and its Effects: Evidence from Canadian Firms Using the Business Outlook Survey Staff working paper 2017-24 Matthieu Verstraete, Lena Suchanek This paper shows (i) that business sentiment, as captured by survey data, matters for monetary policy decisions in Canada, and (ii) how business perspectives are affected by monetary policy shocks. Measures of business sentiment (soft data) are shown to have systematic explanatory power for monetary policy decisions over and above typical Taylor rule variables. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D2, D22, E, E4, E44, E5, E52 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting
August 28, 2006 Productivity, Terms of Trade, and Economic Adjustment Remarks Pierre Duguay Canadian Association for Business Economics Kingston, Ontario The Bank of Canada is keenly interested in productivity - for a number of reasons. Productivity gains are a key determinant of growth in potential output and, hence, of Canada's sustainable pace of non-inflationary economic expansion. Content Type(s): Press, Speeches and appearances, Remarks
Government Corruption and Foreign Direct Investment Under the Threat of Expropriation Staff working paper 2016-13 Christopher Hajzler, Jonathan Rosborough Foreign investment is often constrained by two forms of political risk: expropriation and corruption. We examine the role of government corruption in foreign direct investment (FDI) when contracts are not fully transparent and investors face the threat of expropriation. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F2, F21, F23, F3, F34 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Structural challenges, International trade, finance and competitiveness
Labor Market Policies During an Epidemic Staff working paper 2020-54 Serdar Birinci, Fatih Karahan, Yusuf Mercan, Kurt See We study the labour market and welfare effects of expanding unemployment insurance benefits and introducing payroll subsidies during the COVID-19 pandemic. We find that both policies are complementary and are beneficial to different types of workers. Payroll subsidies preserve the employment of workers in highly productive jobs, while unemployment insurance replaces lost income for workers who experience inevitable job loss. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E24, E6, E62, J, J6, J64 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Optimal Quantitative Easing in a Monetary Union Staff working paper 2020-49 Serdar Kabaca, Renske Maas, Kostas Mavromatis, Romanos Priftis How should a central bank conduct quantitative easing (QE) in a monetary union when regions differ in their size and portfolio characteristics? Optimal QE policy suggests allocating greater purchases from the region that faces stronger portfolio frictions, and not necessarily according to each region’s size. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E43, E5, E52, E58 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy tools and implementation
November 19, 2015 The Effect of Regulatory Changes on Monetary Policy Implementation Frameworks Bank of Canada Review - Autumn 2015 Meyer Aaron, Annick Demers, Sean Durr This article provides an analysis of some recent banking regulatory initiatives that are likely to influence the activities of financial intermediaries and the effectiveness of central bank monetary policy implementation frameworks. Although the effects of individual regulations can be anticipated in most cases, the combined regulatory impact is not yet clear. Central banks should, however, be able to accommodate the effects of the emerging regulatory environment within their existing policy implementation frameworks. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E5, E52, G, G2, G21, L, L5, L50
January 24, 2012 Sectoral Default Rates under Stress: The Importance of Non-Linearities Financial System Review - June 2007 Miroslav Misina, David Tessier Content Type(s): Publications, Financial System Review articles
January 29, 2025 Monetary Policy Report—January 2025—In focus—Recent factors affecting the Canada-US exchange rate The Canadian dollar has declined against the US dollar since October 2024, mostly due to rising uncertainty around trade policies. A widening differential in policy interest rates between the two countries has also played a modest role.