The Dynamics of Capital Flow Episodes Staff working paper 2016-9 Christian Friedrich, Pierre Guérin This paper proposes a novel methodology for identifying episodes of strong capital flows based on a regime-switching model. In comparison with the existing literature, a key advantage of our methodology is to estimate capital flow regimes without the need for context- and sample-specific assumptions. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F2, F21, F3, F32, G, G1, G11 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Econometric, statistical and computational methods, Structural challenges, International trade, finance and competitiveness
Patterns and Determinants of Global Cryptocurrency Flows Staff working paper 2026-15 Christian Friedrich, Laura Zhao This paper analyzes cross-border cryptocurrency flows, focusing on Bitcoin and four major stablecoins. Using data for 162 countries, we identify the key determinants, including responses to weak economic conditions and demand for remittances. A COVID-19 case study supports these findings and emphasizes the role of cryptocurrencies in global finance. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, F, F3, F32, F38, F5, F51, G, G1, G15, G2, G23 Research Theme(s): Money and payments, Digital assets and fintech
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
The Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model Staff discussion paper 2023-5 Martin Kuncl, Dmitry Matveev We use a small open economy model with overlapping generations to evaluate secular dynamics of the neutral rate in Canada from 1980 to 2018. We find that changes in both foreign and domestic factors resulted in a protracted decline in the neutral rate. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E2, E21, E22, E4, E43, E5, E50, E52, E58, F, F4, F41 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Structural challenges, Demographics and labour supply
Sources of pandemic-era inflation in Canada: An application of the Bernanke and Blanchard model Staff analytical note 2024-13 Fares Bounajm, Jean Garry Junior Roc, Yang Zhang We explore the drivers of the surge in inflation in Canada during the COVID-19 pandemic. This work is part of a joint effort by 11 central banks using the model developed by Bernanke and Blanchard (2023) to identify similarities and differences across economies. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E2, E24, E3, E31, E37, E5, E52, E6 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
February 8, 2016 Monetary Policy and Financial Stability—Looking for the Right Tools Remarks Timothy Lane HEC Montréal Montréal, Quebec Deputy Governor Tim Lane discusses the links between monetary policy and financial stability. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Financial system, Financial stability, Monetary policy, Economic models, Inflation, Inflation targeting framework
Exports and the Exchange Rate: A General Equilibrium Perspective Staff working paper 2022-18 Patrick Alexander, Abeer Reza How do a country’s exports change when its currency depreciates? Does it matter which forces drive the exchange rate deprecation in the first place? We find that this relationship varies greatly depending on what drives exchange rate movements, and we conclude that the direct relationship between the exchange rate and exports is weak for Canada. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F3, F31, F32, F33, F4, F41 Research Theme(s): Financial markets and funds management, International markets and currencies, Models and tools, Economic models, Structural challenges, International trade, finance and competitiveness
Capital Flows to Developing Countries: Is There an Allocation Puzzle? Staff working paper 2016-53 Josef Schroth Foreign direct investment inflows are positively related to growth across developing countries—but so are savings in excess of investment. I develop an explanation for this well-established puzzle by focusing on the limited availability of consumer credit in developing countries together with general equilibrium effects. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E13, E2, E21, F, F4, F43 Research Theme(s): Financial system, Financial stability and systemic risk, Structural challenges, International trade, finance and competitiveness
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
From He-Cession to She-Stimulus? The Labor Market Impact of Fiscal Policy Across Gender Staff working paper 2021-42 Alica Ida Bonk, Laure Simon The effects of fiscal policy shocks on labour market outcomes across gender depend on the type of public expenditure. Women benefit most from increases in the government wage bill, while men are the main beneficiaries of higher investment spending. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E6, E62, J, J1, J16, J2, J21 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply