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
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
Losing Contact: The Impact of Contactless Payments on Cash Usage Staff working paper 2020-56 Marie-Hélène Felt Contactless payment cards are a competitive alternative to cash. Using Canadian panel data from 2010 to 2017, this study investigates whether contactless credit cards are an important contributor to the decline in the transactional use of cash. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C33, D, D1, D12, E, E4, E41 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes, Retail payments
Monetary Policy Governance: Bank of Canada Practices to Support Policy Effectiveness Staff discussion paper 2024-14 Brigitte Desroches, Sharon Kozicki, Laure Simon We examine different monetary policy governance structures and discuss the important roles of non-legislated processes and practices. We also provide an update on monetary policy governance at the Bank of Canada and how it has evolved over time. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E0, E02, E5, E58 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
Monetary Policy and the Persistent Aggregate Effects of Wealth Redistribution Staff working paper 2021-38 Martin Kuncl, Alexander Ueberfeldt Monetary policy in the presence of nominal debt and labour supply heterogeneity creates a policy trade-off: a short-term economic stimulus leads to persistently reduced output over the medium term. Price-level targeting weakens this trade-off and is better able to stabilize inflation and output than inflation targeting. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E5, E50 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting
October 19, 2020 Backgrounder on the Business Outlook Survey question on wage growth Starting with the 2020 autumn survey, the results from a question on labour cost growth are being included in the Business Outlook Survey. This document describes the question and presents the correlations between the responses and various measures of wages and employment. Content Type(s): Background materials
How Do People View Price and Wage Inflation? Staff working paper 2022-34 Monica Jain, Olena Kostyshyna, Xu Zhang This paper examines household-level data from the Canadian Survey of Consumer Expectations (CSCE) to understand households’ expectations about price and wage inflation, how those expectations link to views about labour market conditions and the subsequent impact on households’ outlook for real spending growth. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C8, C83, D, D8, D84, E, E2, E21, E24, E3, E31 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
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
Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments Staff working paper 2020-36 Elizabeth Caucutt, Lance Lochner, Joseph Mullins, Youngmin Park Can daycare replace parents’ time spent with children? We explore this by using data on how parents spend time and money on children and how this spending is related to their child’s development. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, D13, H, H3, H31, J, J2, J22, J24 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Estimating the Effect of Exchange Rate Changes on Total Exports Staff working paper 2019-17 Thierry Mayer, Walter Steingress This paper shows that real effective exchange rate (REER) regressions, the standard approach for estimating the response of aggregate exports to exchange rate changes, imply biased estimates of the underlying elasticities. We provide a new aggregate regression specification that is consistent with bilateral trade flows micro-founded by the gravity equation. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F1, F11, F12, F3, F31, F32 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Structural challenges, International trade, finance and competitiveness