Determinants of Borrowing Limits on Credit Cards Staff Working Paper 2005-7 Shubhasis Dey, Gene Mumy The difference between actual borrowings and borrowing limits alone generates information asymmetry in the credit card market. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Market structure and pricing JEL Code(s): C, C3, D, D4, D8, D82
February 23, 2012 Medium-Term Fluctuations in Canadian House Prices Bank of Canada Review - Winter 2011-2012 Brian Peterson, Yi Zheng This article draws on theory and empirical evidence to examine a number of factors behind movements in Canadian house prices. It begins with an overview of the movements in house prices in Canada, using regional data to highlight factors that influence prices over the long run. It then turns to the central theme, that there are medium-run movements in prices not accounted for by long-run factors. Drawing on recent Bank of Canada research, the article discusses several factors behind these medium-run movements, including interest rates, expected price appreciation and market liquidity. The article concludes by identifying areas for future research that would further our understanding of fluctuations in house prices. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Asset pricing, Econometric and statistical methods, Market structure and pricing JEL Code(s): R, R2, R21, R3, R31
Import Price Dynamics in Major Advanced Economies and Heterogeneity in Exchange Rate Pass-Through Staff Working Paper 2008-39 Stephane Dees, Matthias Burgert, Nicolas Parent This paper aims at showing heterogeneity in the degree of exchange rate pass-through to import prices in major advanced economies at three different levels: 1) across destination markets; 2) across types of exporters (distinguishing developed economy from emerging economy exporters); and 3) over time. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates, Inflation and prices JEL Code(s): E, E3, E31, F, F3, F4, F41
Money and Costly Credit Staff Working Paper 2011-7 Mei Dong I study an economy in which money and credit coexist as means of payment and the settlement of credit requires money. The model extends recent developments in microfounded monetary theory to address the choice of payment methods and the effects of inflation. Whether a buyer uses money or credit depends on the fixed cost of credit and the inflation rate. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Inflation: costs and benefits JEL Code(s): E, E4, E41, E5, E50
The Bank of Canada's New Quarterly Projection Model, Part 3. The Dynamic Model: QPM Technical Report No. 75 Donald Coletti, Benjamin Hunt, David Rose, Robert Tetlow The Bank of Canada's new Quarterly Projection Model, QPM, combines the short-term dynamic properties necessary to support regular economic projections with the consistent behavioural structure necessary for policy analysis. Content Type(s): Staff research, Technical reports Research Topic(s): Economic models JEL Code(s): C, C5, C53, E, E1, E17
The Neutral Rate in Canada: 2019 Update Staff Analytical Note 2019-11 Thomas J. Carter, Xin Scott Chen, José Dorich This note provides an update on Bank of Canada staff’s assessment of the Canadian neutral rate. The neutral rate is the policy rate needed to keep output at its potential level and inflation at target once the effects of any cyclical shocks have dissipated. This medium- to long-run concept serves as a benchmark for gauging the degree of monetary stimulus provided by a given policy setting. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41
Unsecured Debt, Consumer Bankruptcy, and Small Business Staff Working Paper 2008-5 Césaire Meh, Yaz Terajima In this paper we develop a quantitative model of entrepreneurial activity (risk-taking) and consumer bankruptcy choices and use the model to study the effects of bankruptcy regulations on entrepreneurial activity, bankruptcy rate and welfare. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Financial stability, Financial system regulation and policies JEL Code(s): D, D3, D31, E, E2, E21, J, J2, J23
Bond Funds and Fixed-Income Market Liquidity: A Stress-Testing Approach Technical Report No. 115 Rohan Arora, Guillaume Bédard-Pagé, Guillaume Ouellet Leblanc, Ryan Shotlander This report provides a detailed technical description of a stress test model for investment funds called Ceto. Content Type(s): Staff research, Technical reports Research Topic(s): Economic models, Financial institutions, Financial markets, Financial stability JEL Code(s): G, G1, G12, G14, G2, G20, G23
Nowcasting the Global Economy Staff Discussion Paper 2010-12 James Rossiter Forecasts of global economic activity and inflation are important inputs when conducting monetary policy in small open economies such as Canada. As part of the Bank of Canada's broad agenda to augment its short-term forecasting tools, the author constructs simple mixed-frequency forecasting equations for quarterly global output, imports, and inflation using the monthly global Purchasing Managers Index (PMI). Content Type(s): Staff research, Staff discussion papers Research Topic(s): Economic models, International topics JEL Code(s): E, E3, E37, F, F4, F47
Monetary Policy Under Uncertainty: Practice Versus Theory Staff Discussion Paper 2017-13 Rhys R. Mendes, Stephen Murchison, Carolyn A. Wilkins For central banks, conducting policy in an environment of uncertainty is a daily fact of life. This uncertainty can take many forms, ranging from incomplete knowledge of the correct economic model and data to future economic and geopolitical events whose precise magnitudes and effects cannot be known with certainty. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Monetary policy, Monetary policy and uncertainty JEL Code(s): E, E5, E52, E58, E6, E61, E65