What to Target? Insights from a Lab Experiment Staff Working Paper 2021-53 Isabelle Salle In a laboratory experiment, we ask participants to predict inflation using three different policy regimes: inflation targeting—with and without greater communication of the target—average inflation targeting and price level targeting. We use participants’ predictions to compare the level and stability of inflation under each regime. Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation targets, Monetary policy communications, Monetary policy framework JEL Code(s): C, C9, C92, E, E3, E31, E5, E52, E7
February 9, 2022 The role of Canadian business in fostering non-inflationary growth Remarks (delivered virtually) Tiff Macklem Canadian Chamber of Commerce Ottawa, Ontario Governor Tiff Macklem discusses how business investment and stronger productivity are vital to sustaining non-inflationary economic growth. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Coronavirus disease (COVID-19), Expectations, Firm dynamics, Inflation and prices, Labour markets, Monetary policy, Productivity, Recent economic and financial developments
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
Payment Habits During COVID-19: Evidence from High-Frequency Transaction Data Staff Working Paper 2021-43 Tatjana Dahlhaus, Angelika Welte We examine how consumers have adjusted their payment habits during the COVID-19 pandemic. They seem to perform fewer transactions, spend more in each transaction, use less cash at the point of sale and withdraw cash from ATMs linked to their financial institution more often than from other ATMs. Content Type(s): Staff research, Staff working papers Research Topic(s): Coronavirus disease (COVID-19), Domestic demand and components, Payment clearing and settlement systems, Recent economic and financial developments JEL Code(s): C, C2, C22, C5, C55, D, D1, D12, E, E2, E21, E4, E42, E5, E52
February 23, 2012 Household Borrowing and Spending in Canada Bank of Canada Review - Winter 2011-2012 Jeannine Bailliu, Katya Kartashova, Césaire Meh Understanding how much of the increased debt load of Canadian households has been used to finance household spending on consumption and home renovation is important for the conduct of monetary policy. In this article, the authors use a comprehensive data set that provides information on the uses of debt by Canadian households. They first present some facts regarding the evolution of Canadian household debt over the period from 1999 to 2010, emphasizing the increased importance of debt flows that are secured by housing. They then explore how Canadian households have used their borrowed funds over the same period, and assess the role of these borrowed funds in financing total consumption and spending on home renovation. Finally, they examine the possible effects of a decline in house prices on consumption when housing equity is used as collateral against household indebtedness. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Credit and credit aggregates, Domestic demand and components, Monetary policy transmission JEL Code(s): E, E2, E21, E5, E51, H, H3, H31
December 22, 2003 Current Account Imbalances: Some Key Issues for the Major Industrialized Countries Bank of Canada Review - Winter 2003-2004 Jocelyn Jacob The resurgence of sizable current account imbalances in the major economies in recent years, particularly the tripling of the U.S. deficit, has led to renewed academic and public discussions about their sustainability. Jacob's main objective is to show that current account balances are simply the outcome of various relative structural and cyclical forces between trading partners. He reviews the factors behind the changes in the current account positions of the three largest industrial economies (the United States, Japan, and the euro area). Two strong determinants shaping the current account balances are the faster increase in U.S. productivity compared with that of other major economies and, more recently, the loosening in the U.S. fiscal stance. Jacob also reviews a range of outside assessments from such sources as the Organisation for Economic Co-operation and Development and the International Monetary Fund, as well as the academic literature, to determine the possible risks to macroeconomic and financial stability. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Exchange rates, International topics
Central Bank Haircut Policy Staff Working Paper 2010-23 James Chapman, Jonathan Chiu, Miguel Molico We present a model of central bank collateralized lending to study the optimal choice of the haircut policy. We show that a lending facility provides a bundle of two types of insurance: insurance against liquidity risk as well as insurance against downside risk of the collateral. Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Financial services, Financial system regulation and policies, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): E, E4, E40, E5, E50
Amazon Effects in Canadian Online Retail Firm-Product-Level Data Staff Working Paper 2019-42 Alex Chernoff I use firm-product-level data for Canadian online retailers to study how product scope (the average number of product categories per firm) evolved from 1999 to 2012. During this period, product scope dropped monotonically from 59 to 5 product categories. Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Service sector JEL Code(s): D, D2, D22, L, L1, L11, L8, L81
Estimating the impacts on GDP of natural disasters in Canada Staff Analytical Note 2025-5 Tatjana Dahlhaus, Thibaut Duprey, Craig Johnston Extreme weather events contribute to increased volatility in both economic activity and prices, interfering with the assessment of the true underlying trends of the economy. With this in mind, we conduct a timely assessment of the impact of natural disasters on Canadian gross domestic product (GDP). Content Type(s): Staff research, Staff analytical notes Research Topic(s): Climate change, Domestic demand and components, Econometric and statistical methods, Fiscal policy, Regional economic developments JEL Code(s): B, B2, B23, C, C1, C13, C2, C23, E, E1, E17, E3, E37, E6, E62, H, H6
November 12, 2020 Exploring life after COVID-19: the far side of the moon Remarks (delivered virtually) Carolyn A. Wilkins Munk School of Global Affairs and Public Policy Toronto, Ontario Senior Deputy Governor Carolyn A. Wilkins discusses what the economy will need once we’re past the COVID-19 crisis. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Business fluctuations and cycles, Central bank research, Climate change, Coronavirus disease (COVID-19), Debt management, Digital currencies and fintech, Expectations, Financial institutions, Financial stability, Financial system regulation and policies, Firm dynamics, Fiscal policy, Inflation targets, Interest rates, Labour markets, Monetary policy communications, Monetary policy framework, Payment clearing and settlement systems, Potential output, Productivity, Recent economic and financial developments