March 9, 2010 Inflation Expectations and the Conduct of Monetary Policy: A Review of Recent Evidence and Experience Bank of Canada Review - Spring 2010 Rose Cunningham, Brigitte Desroches, Eric Santor This article explores the role of inflation expectations in the conduct of monetary policy. It reviews the various measures of inflation expectations used by central banks, including surveys and market-based indicators, and considers their advantages and disadvantages. It examines the critical role of inflation expectations in the framework that central banks use to understand, forecast, and control inflation. It also looks at their role as an indicator of central bank credibility. The behaviour of inflation expectations over the past two years is analyzed and policy conclusions are offered. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Inflation targets, Monetary policy implementation
May 19, 2011 Understanding and Measuring Liquidity Risk: A Selection of Recent Research Bank of Canada Review - Spring 2011 Céline Gauthier, Hajime Tomura During the recent financial crisis, one of the forces set in motion by the initial losses on subprime-mortgage loans was a significant decline in the market liquidity of assets and in the ability of financial institutions to obtain funding in wholesale markets. In this article, the authors summarize recent research that clarifies the role of liquidity in destabilizing the financial system and examine the implications of this research for the recently announced financial system reforms, including Basel III. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Financial markets, Financial stability, Financial system regulation and policies
An Introduction to Wavelets for Economists Staff Working Paper 2002-3 Christoph Schleicher Wavelets are mathematical expansions that transform data from the time domain into different layers of frequency levels. Compared to standard Fourier analysis, they have the advantage of being localized both in time and in the frequency domain, and enable the researcher to observe and analyze data at different scales. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods JEL Code(s): C, C1
Education and Self-Employment: Changes in Earnings and Wealth Inequality Staff Working Paper 2006-40 Yaz Terajima The author quantitatively studies the interaction between education and occupation choices and its implication for the relationship between the changes in earnings inequality and the changes in wealth inequality in the United States over the 1983–2001 period. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Labour markets JEL Code(s): D, D3, D31, I, I2, I21, J, J2, J23
Endogenous Credibility and Wage-Price Spirals Staff Working Paper 2024-14 Olena Kostyshyna, Tolga Özden, Yang Zhang We quantitively assess the risks of a wage-price spiral occurring in Canada over history. We find the risk of a wage-price spiral increases when the inflation expectations become unanchored and the credibility of central banks declines. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Credibility, Inflation and prices, Monetary policy JEL Code(s): C, C2, C22, E, E0, E00, E4, E47, E7
Impact of Electronic Trading Platforms on the Brokered Interdealer Market for Government of Canada Benchmark Bonds Staff Working Paper 2007-5 Natasha Khan This study examines the impact of increased transparency, brought about by the introduction of three electronic trading systems, on the brokered interdealer market for Government of Canada benchmark securities. Using the CanPX dataset for the 2-, 5-, 10-, and 30-year benchmarks, the paper finds some evidence of decreased bid-ask spreads for the 30-year benchmark in the months following the introduction of the electronic platforms. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, Market structure and pricing JEL Code(s): G, G1, G10, G14
October 24, 2016 Renewal of the Inflation-Control Target (October 2016) Commentary and technical data relating to the 2016 target renewal. Content Type(s): Background materials Research Topic(s): Inflation and prices, Monetary policy
Core Inflation Technical Report No. 89 Seamus Hogan, Marianne Johnson, Thérèse Laflèche The Bank of Canada uses core CPI inflation, the year-over-year rate of change of the consumer price index excluding food, energy, and the effects of changes in indirect taxes, as the operational guide for monetary policy. Content Type(s): Staff research, Technical reports Research Topic(s): Inflation and prices JEL Code(s): E, E3, E31
Sequencing Extended Monetary Policies at the Effective Lower Bound Staff Discussion Paper 2021-10 Yang Zhang, Lena Suchanek, Jonathan Swarbrick, Joel Wagner, Tudor Schlanger In this analysis, we use simulations in the Bank of Canada’s projection model—the Terms-of-Trade Economic Model—to consider a suite of extended monetary policies to support the economy following the COVID-19 crisis. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Coronavirus disease (COVID-19), Monetary policy, Monetary policy transmission JEL Code(s): E, E3, E4, E5, E52, E58
Short Changed? The Market's Reaction to the Short Sale Ban of 2008 Staff Working Paper 2009-23 Louis Gagnon, Jonathan Witmer Do short sales restrictions have an impact on security prices? We address this question in the context of a natural experiment surrounding the short sale ban of 2008 using a comprehensive sample of Canadian stocks cross-listed in the U.S. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, International topics JEL Code(s): F, F3, F30, G, G0, G01, G1, G18, G2, G20