March 9, 2010 Monetary Policy Rules in an Uncertain Environment Bank of Canada Review - Spring 2010 Gino Cateau, Stephen Murchison This article examines recent research on the influence of various forms of economic uncertainty on the performance of different classes of monetary policy rules: from simple rules to fully optimal monetary policy under commitment. The authors explain why uncertainty matters in the design of monetary policy rules and provide quantitative examples from the recent literature. They also present results for several policy rules in ToTEM, the Bank of Canada's main model for projection and analysis, including rules that respond to price level, rather than to inflation. Content Type(s): Publications, Bank of Canada Review articles
Sluggish Forecasts Staff working paper 2018-39 Monica Jain Given the influence that agents’ expectations have on key macroeconomic variables, it is surprising that very few papers have tried to extrapolate agents’ “true” expectations directly from the data. This paper presents one such approach, starting with the hypothesis that there is sluggishness in inflation and real GDP growth forecasts. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E31, E37 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
Privacy as a Public Good: A Case for Electronic Cash Staff working paper 2019-24 Rodney J. Garratt, Maarten van Oordt Cash gives users a high level of privacy when making payments, but the use of cash to make payments is declining. People increasingly use debit cards, credit cards or other methods to pay. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E42, G, G2, G28 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech, Retail payments
Identifying Aggregate Shocks with Micro-level Heterogeneity: Financial Shocks and Investment Fluctuation Staff working paper 2020-17 Xing Guo This paper identifies aggregate financial shocks and quantifies their effects on business investment based on an estimated DSGE model with firm-level heterogeneity. On average, financial shocks contribute only 3% of the variation in U.S. public firms’ aggregate investment. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E12, E2, E22, G, G3, G31, G32 Research Theme(s): Financial system, Household and business credit, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
An update on the Canadian money market mutual fund sector Staff analytical note 2025-25 Jabir Sandhu, Sofia Tchamova, Rishi Vala We examine the Canadian money market fund (MMF) sector and find that it has grown rapidly, holding a large share of treasury bills and commercial paper. Unlike in some other jurisdictions where investor outflows likely amplified stresses, Canadian MMFs experienced inflows during the March 2020 market turmoil. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E40, G, G0, G00, G01, G1, G2, G23 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Financial stability and systemic risk
Monetary Policy, Credit Constraints and SME Employment Staff working paper 2022-49 Julien Champagne, Émilien Gouin-Bonenfant We revisit an old question: how do financial constraints affect the transmission of monetary policy to the real economy? To answer this question, we propose a simple empirical strategy that combines firm-level employment and balance sheet data, identified monetary policy shocks and survey data on financing activities. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E3, E4, E43, E5, E52, G, G3 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
January 27, 2012 Simulation Analysis: A Tool for Examining the Balance between Safety and Efficiency in Canada’s Large Value Transfer System Financial System Review - December 2005 Neville Arjani Content Type(s): Publications, Financial System Review articles
Extreme Weather and Low-Income Household Finance: Evidence from Payday Loans Staff working paper 2024-1 Shihan Xie, Victoria Wenxin Xie, Xu Zhang This paper explores the impact of extreme weather exposures on the financial outcomes of low-income households. Our findings highlight the heightened financial vulnerability of low-income households to environmental shocks and underscore the need for targeted policies. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G5, Q, Q5, Q54 Research Theme(s): Financial system, Household and business credit, Structural challenges, Climate change
Credit Risk Transfer and Bank Insolvency Risk Staff working paper 2017-59 Maarten van Oordt The present paper shows that, everything else equal, some transactions to transfer portfolio credit risk to third-party investors increase the insolvency risk of banks. This is particularly likely if a bank sells the senior tranche and retains a sufficiently large first-loss position. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G2, G21, G28, G3, G32 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Household and business credit
What Drives Episodes of Settlement Fails in the Government of Canada Bond Market? Staff working paper 2017-54 Jean-Sébastien Fontaine, James Pinnington, Adrian Walton We study settlement fails for trades in the Government of Canada bond market. We find that settlement fails do not occur independently. Using a novel and comprehensive dataset, we examine three drivers of fails. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, G, G1, G2, G21, L, L1 Research Theme(s): Financial markets and funds management, Market functioning, Money and payments, Payment and financial market infrastructures