Sources of Borrowing and Fiscal Multipliers Staff Working Paper 2018-32 Romanos Priftis, Srecko Zimic This paper finds that debt-financed government spending multipliers vary considerably depending on the location of the debt buyer. In a sample of 33 countries, we find that government spending multipliers are larger when government purchases are financed by issuing debt to foreign investors (non-residents), compared with when government purchases are financed by issuing debt to home investors (residents). Content Type(s): Staff research, Staff working papers Research Topic(s): Debt management, Economic models, Fiscal policy, International financial markets JEL Code(s): E, E2, E6, E62, F, F4, F41, H, H3
The Role of Convenience and Risk in Consumers' Means of Payment Staff Discussion Paper 2009-8 Carlos Arango, Varya Taylor Using data from a 2004 survey of the Canadian public, the authors study the role of convenience and risk in consumers' use of cash relative to debit and credit cards. The authors find that consumers who perceive debit cards and credit cards to be more convenient and less risky than cash use them more frequently. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes JEL Code(s): E, E4, E41, L, L2
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
June 25, 2005 Bank of Canada Review - Summer 2005 Cover page African Marriage Money The metal marriage currencies pictured on the cover are part of the National Currency Collection, Bank of Canada. Photography by Gord Carter, Ottawa. Content Type(s): Publications, Bank of Canada Review
Term Structure Transmission of Monetary Policy Staff Working Paper 2007-30 Sharon Kozicki, P. A. Tinsley Under bond-rate transmission of monetary policy, the authors show that a generalized Taylor Principle applies, in which the average anticipated path of policy responses to inflation is subject to a lower bound of unity. This result helps explain how bond rates may exhibit stable responses to inflation, even in periods of passive policy. Content Type(s): Staff research, Staff working papers Research Topic(s): Interest rates, Monetary policy transmission JEL Code(s): E, E3, E5, N, N1
Exchange Rates and Oil Prices Staff Working Paper 1995-8 Robert Amano, Simon van Norden This paper derives analytical gradients for a broad class of regime-switching models with Markovian state-transition probabilities. Such models are usually estimated by maximum likelihood methods, which require the derivatives of the likelihood function with respect to the parameter vector. These gradients are usually calculated by means of numerical techniques. The paper shows that analytical gradients […] Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates
Entrepreneurship, Inequality, and Taxation Staff Working Paper 2002-14 Césaire Meh This paper confirms the conjecture that the evaluation of tax policy leads to very different conclusions once the role of entrepreneurs is considered. Contrary to previous literature, the author finds that switching from a progressive to a proportional income tax system has a negligible effect on wealth inequality in the United States. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Fiscal policy JEL Code(s): D, D3, D31, E, E6, E62, H, H2, H20, H23
Monetary Policy and Government Debt Dynamics Without Commitment Staff Working Paper 2019-52 Dmitry Matveev I show that maturity considerations affect the optimal conduct of monetary and fiscal policy during a period of government debt reduction. I consider a New Keynesian model and study a dynamic game of monetary and fiscal policy authorities without commitment, characterizing the incentives that drive the choice of interest rate. Content Type(s): Staff research, Staff working papers Research Topic(s): Fiscal policy, Monetary policy JEL Code(s): E, E5, E52, E6, E62, E63
Structural Inflation Models with Real Wage Rigidities: The Case of Canada Staff Working Paper 2009-21 Jean-Marie Dufour, Lynda Khalaf, Maral Kichian Real wage rigidities have recently been proposed as a way of building intrinsic persistence in inflation within the context of New Keynesian Phillips Curves. Using two recent illustrative structural models, we evaluate empirically the importance of real wage rigidities in the data and the extent to which such models provide useful information regarding price stickiness. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Inflation and prices, Labour markets JEL Code(s): C, C1, C13, C5, C52, E, E3, E31
Endogenously Segmented Asset Market in an Inventory Theoretic Model of Money Demand Staff Working Paper 2007-46 Jonathan Chiu This paper studies the effects of monetary policy in an inventory theoretic model of money demand. In this model, agents keep inventories of money, despite the fact that money is dominated in rate of return by interest bearing assets, because they must pay a fixed cost to transfer funds between the asset market and the goods market. Content Type(s): Staff research, Staff working papers Research Topic(s): Monetary policy framework, Monetary policy transmission JEL Code(s): E, E3, E31, E4, E41, E5, E50