Methodology for Assigning Credit Ratings to Sovereigns Staff discussion paper 2017-7 Philippe Muller, Jérôme Bourque The investment of foreign exchange reserves or other asset portfolios requires an assessment of the credit quality of investment counterparties. Traditionally, foreign exchange reserve and asset managers have relied on credit rating agencies (CRAs) as the main source for credit assessments. Content Type(s): Staff research, Staff discussion papers JEL Code(s): F, F3, F31, G, G2, G24, G28, G3, G32 Research Theme(s): Financial markets and funds management, Funds management, Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Models and tools, Economic models
The Share of Systematic Variations in the Canadian Dollar—Part II Staff analytical note 2017-1 Jean-Sébastien Fontaine, Guillaume Nolin This analytical note examines how much of the systematic variation in the Canadian dollar is attributable to its sensitivity to commodity prices. We introduce a new “oil” portfolio that captures systematic variations when the exchange rates of commodity exporters and commodity importers move in opposite directions. Content Type(s): Staff research, Staff analytical notes JEL Code(s): F, F3, F31 Research Theme(s): Financial markets and funds management, International markets and currencies
Analyzing the house price boom in the suburbs of Canada’s major cities during the pandemic Staff analytical note 2022-7 Louis Morel We assess how location affects house prices in Canada. The gap in prices between suburbs and downtown was closing gradually before the pandemic. The gap has been closing faster since spring 2020. This finding reflects a shift in preferences toward more living space. Content Type(s): Staff research, Staff analytical notes JEL Code(s): R, R2, R21, R23, R3, R32 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting
Financial Development Beyond the Formal Financial Market Staff working paper 2018-49 Lin Shao This paper studies the effects of financial development, taking into account both formal and informal financing. Using cross-country firm-level data, we document that informal financing is utilized more by rich countries than poor countries. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, O, O1, O17, O4, O47 Research Theme(s): Financial system, Financial institutions and intermediation, Household and business credit, Monetary policy, Real economy and forecasting
Strengthening Inflation Targeting: Review and Renewal Processes in Canada and Other Advanced Jurisdictions Staff discussion paper 2020-7 Robert Amano, Thomas J. Carter, Lawrence L. Schembri We summarize the review and renewal process at four central banks (Reserve Bank of New Zealand, Bank of England, Sveriges Riksbank and the US Federal Reserve Bank) and compare them with the process at the Bank of Canada, which has been well-established since 2001. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E5, E52, E58 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
Crude Oil Prices and Fixed-Asset Cash Spending in the Oil and Gas Industry: Findings from VAR Models Staff analytical note 2016-8 Farrukh Suvankulov This note investigates the relationship between crude oil prices and investment in the energy sector. We employ a set of vector autoregression (VAR) models (unconstrained VAR, vector error-correction and Bayesian VAR) to formalize the relationship between the West Texas Intermediate (WTI) benchmark and fixed-asset cash spending in the oil and gas extraction and support activities sector of the Canadian economy. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E2, E22, E27, Q, Q4, Q43, Q47 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting
Labour Supply and Firm Size Staff working paper 2023-47 Lin Shao, Faisal Sohail, Emircan Yurdagul This paper documents a systematic pattern of how wages, hours and their relationship vary across firms of different sizes. Using a model with heterogeneous firms and workers, we show how the interplay between wages, hours and firm size affect worker sorting and inequality. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E24, J, J2, J3, J31 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Financial Constraint and Productivity: Evidence from Canadian SMEs Staff working paper 2016-44 Shutao Cao, Danny Leung The degree to which financial constraint is binding is often not directly observable in commonly used business data sets (e.g., Compustat). In this paper, we measure and estimate the likelihood of a firm being constrained by external financing using a data set of small- and medium-sized Canadian firms. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D2, D24, G, G3, G32, L, L2, L25 Research Theme(s): Financial system, Financial institutions and intermediation, Household and business credit, Models and tools, Economic models, Structural challenges, Digitalization and productivity
Bouncing Back: How Mothballing Curbs Prices Staff working paper 2024-51 Thibaut Duprey, Artur Kotlicki, Daniel E. Rigobon, Philip Schnattinger We investigate the macroeconomic impacts of mothballed businesses—those that closed temporarily—on sectoral equilibrium prices after a negative demand shock. Our results suggest that pandemic fiscal support for temporary closures may have eased inflationary pressures. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C55, C8, C81, D, D2, D22, E, E3, E32 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
April 25, 2005 Understanding China's Long-Run Growth Process and Its Implications for Canada Bank of Canada Review - Spring 2005 Michael Francis, François Painchaud, Sylvie Morin In the past 25 years, China has introduced numerous reforms, gradually moving from a centrally planned economy towards a socialist market economy capable of robust and sustainable economic growth. China's increasing integration into the global economy, which has been fuelled by this recent and rapid economic growth, has already begun to affect the economies of other countries and to present challenges for policy-makers, both in China and abroad. In addition to examining the determinants of China's past and current growth, the authors consider factors that are likely to support continued growth in the future and assess the implications for both the world and the Canadian economies. Content Type(s): Publications, Bank of Canada Review articles