December 15, 2023 The path to price stability Remarks Tiff Macklem Canadian Club Toronto Toronto, Ontario Governor Tiff Macklem discusses how the economy will continue to adjust to higher interest rates in the year ahead, and outlines what Canadians can expect from the Bank of Canada. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Monetary policy, Economic models, Economy/Economic growth, Inflation, Inflation targeting framework
Intermediary Market Power and Capital Constraints Staff working paper 2023-51 Jason Allen, Milena Wittwer We examine how intermediary capitalization affects asset prices in a framework that allows for intermediary market power. We introduce a model in which capital-constrained intermediaries buy or trade an asset in an imperfectly competitive market, and we show that weaker capital constraints lead to both higher prices and intermediary markups. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D4, D40, D44, G, G1, G12, G18, G2, G20, L, L1, L10 Research Theme(s): Financial markets and funds management, Funds management, Market functioning, Market structure, Financial system, Financial institutions and intermediation
November 13, 2000 Seminar Summary: Price Stability and the Long-Run Target for Monetary Policy Bank of Canada Review - Autumn 2000 Allan Crawford On 8 and 9 June 2000, the Bank held a seminar to examine some key issues affecting the upcoming decision on Canada's inflation-control target for the period after 2001. The main issues covered at the seminar were the extent of downward nominal-wage rigidity and its implications for employment as well as the relative merits of price-level targeting versus inflation targeting. Another critical question that was discussed was how to balance the evidence on all the relevant issues in order to develop an overall view on the appropriate long-run target. The author gives a brief overview of the seminar followed by detailed summaries of individual papers. Content Type(s): Publications, Bank of Canada Review articles
COVID-19 and bond market liquidity: alert, isolation and recovery Staff analytical note 2020-14 Jean-Sébastien Fontaine, Hayden Ford, Adrian Walton The disruption due to COVID-19 reverberated through the bond markets in three phases. In the first phase, dealers met the rising demand for liquidity. In the second, dealers reduced the supply of liquidity, and trading conditions worsened significantly. Finally, the market returned to relative stability following several interventions by the Bank of Canada. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4 Research Theme(s): Financial markets and funds management, Funds management, Market functioning, Financial system, Financial stability and systemic risk
A Review of the Bank of Canada’s Market Operations Related to COVID-19 Staff discussion paper 2023-6 Grahame Johnson This paper reviews the range of extraordinary programs launched by the Bank of Canada in response to the pandemic-related financial market disruption. It provides some recommendations for future interventions to ensure the programs are appropriately structured for the financial and economic stresses they are intended to address. Content Type(s): Staff research, Staff discussion papers JEL Code(s): D, D4, D47, E, E4, E41, E5, G, G0, G01, G1, G14, G2, G21, G23, H, H1, H12 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Monetary policy, Monetary policy tools and implementation
June 24, 2007 Price Formation and Liquidity Provision in the Markets for European and Canadian Government Securities Financial System Review - June 2007 Chris D'Souza, Ingrid Lo, Stephen Sapp Content Type(s): Publications, Financial System Review articles
Macroeconomic Disasters and Consumption Smoothing: International Evidence from Historical Data Staff working paper 2023-4 Lorenzo Pozzi, Barbara Sadaba Does consumption smoothing fundamentally decrease during macroeconomic disasters? This paper uses a large historical dataset (1870–2016) for 16 industrial economies to show that during macroeconomic disasters (e.g., wars, pandemics, depressions) aggregate consumption and income are significantly less decoupled than during normal times. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C23, E, E2, E21 Research Theme(s): Financial system, Household and business credit, Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting
The Power of Helicopter Money Revisited: A New Keynesian Perspective Staff discussion paper 2020-1 Thomas J. Carter, Rhys R. Mendes We analyze money financing of fiscal transfers (helicopter money) in two simple New Keynesian models: a “textbook” model in which all money is non-interest-bearing (e.g., all money is currency), and a more realistic model with interest-bearing reserves. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E1, E12, E4, E41, E43, E5, E51, E52, E58, E6, E61, E63 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
January 26, 2012 Collateral Valuation for Extreme Market Events Financial System Review - December 2006 Alejandro García, Ramazan Gençay Content Type(s): Publications, Financial System Review articles
June 23, 2004 Financial System Review - June 2004 This section of the Financial System Review examines the recent performance of the Canadian financial system and the factors, both domestic and international, that are influencing it. In each issue, one or more subjects of particular interest are discussed as highlighted topics. Content Type(s): Publications, Financial Stability Report