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2124 Results

Has wage setting changed in Canada? Evidence from the pre-pandemic 2020 Wage-Setting Survey

Staff analytical note 2022-10 David Amirault, Sarah Miller, Matthieu Verstraete
Just before the pandemic began, the Bank of Canada conducted the 2020 Wage-Setting Survey. The goal was to explore the unusual trend of subdued wage growth in 2018 and 2019 despite a tightening in the labour market. Although this wage puzzle was beginning to resolve at the time of the survey, results highlight changes in several factors that may have important impacts on wage dynamics.

Output Comovement and Inflation Dynamics in a Two-Sector Model with Durable Goods: The Role of Sticky Information and Heterogeneous Factor Markets

Staff working paper 2016-36 Tomiyuki Kitamura, Tamon Takamura
In a simple two-sector New Keynesian model, sticky prices generate a counterfactual negative comovement between the output of durable and nondurable goods following a monetary policy shock. We show that heterogeneous factor markets allow any combination of strictly positive price stickiness to generate positive output comovement.

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.

Do Monetary Policy Shocks Affect the Neutral Rate of Interest?

Staff working paper 2026-6 Danilo Leiva-Leon, Rodrigo Sekkel, Luis Uzeda
Can monetary policy influence the neutral real interest rate (r-star)? Using a new statistical model, we show that interest rate hikes tend to lower r-star and long-run growth, but that monetary policy explains only a small share of the long-run decline in r-star.

Using Speed and Credit Limits to Address the Procyclicality of Initial Margin at Central Counterparties

Staff discussion paper 2016-18 Nikil Chande, Nicholas Labelle
This paper proposes a practical approach to address the procyclicality of initial margin at central counterparties (CCPs) that can work even in periods of extreme stress. The approach allows CCPs to limit the speed of margin increases resulting from spikes in market volatility.

Consumers’ Path to Mortgage Delinquency

Staff analytical paper 2026-3 Laura Zhao, Jia Qi Xiao, Aidan Witts
Analyzing TransUnion data from 2015–2024, this study identifies a systematic timeline of distress where rising credit utilization and non-mortgage arrears precede mortgage delinquency by up to two years. This deterioration intensifies in the final six months, providing a robust suite of high-frequency indicators for monitoring emerging household stress.

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.

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.
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