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29 Results

Exports and the Exchange Rate: A General Equilibrium Perspective

Staff Working Paper 2022-18 Patrick Alexander, Abeer Reza
How do a country’s exports change when its currency depreciates? Does it matter which forces drive the exchange rate deprecation in the first place? We find that this relationship varies greatly depending on what drives exchange rate movements, and we conclude that the direct relationship between the exchange rate and exports is weak for Canada.

A Macroprudential Theory of Foreign Reserve Accumulation

Staff Working Paper 2019-43 Fernando Arce, Julien Bengui, Javier Bianchi
This paper proposes a theory of foreign reserves as macroprudential policy. We study an open-economy model of financial crises in which pecuniary externalities lead to overborrowing, and show that by accumulating international reserves, the government can achieve the constrained-efficient allocation.
March 14, 2019

The Age of Leverage

Remarks Carolyn A. Wilkins UBC Vancouver School of Economics and CFA Society Vancouver Vancouver, British Columbia
Senior Deputy Governor Carolyn A. Wilkins discusses how high leverage is both a headwind to global growth and a vulnerability in the global financial system.

The Size and Destination of China’s Portfolio Outflows

Staff Discussion Paper 2018-11 Rose Cunningham, Eden Hatzvi, Kun Mo
The size of China’s financial system raises the possibility that the liberalization of its capital account could have a large effect on the global financial system. This paper provides a counterfactual scenario analysis that estimates what the size and direction of China’s overseas portfolio investments would have been in 2015 if China had had no restrictions on these outflows.

Can the Canadian International Investment Position Stabilize a Slowing Economy?

Staff Analytical Note 2017-14 Maxime Leboeuf, Chen Fan
In this note, we find that valuation effects can act as an important stabilizer, strengthening Canada’s net external wealth when its economic outlook worsens relative to that of other countries.
June 8, 2017

Canada’s International Investment Position: Benefits and Potential Vulnerabilities

While greater global financial integration is beneficial, the authors discuss how foreign capital inflows can also facilitate the buildup of domestic vulnerabilities and potentially lead to destabilizing reversals. Canada’s current international investment position is typical of advanced economies and will likely continue to act as an economic stabilizer. However, the growth and composition of Canada’s international investment position warrant continued monitoring.

Global Real Activity for Canadian Exports: GRACE

Staff Discussion Paper 2017-2 André Binette, Tony Chernis, Daniel de Munnik
Canadian exports have often disappointed since the Great Recession. The apparent disconnect between exports and the Bank of Canada’s current measure of foreign demand has created an impetus to search for an alternative.

An Improved Equation for Predicting Canadian Non-Commodity Exports

Staff Discussion Paper 2017-1 Patrick Alexander, Jean-Philippe Cayen, Alex Proulx
We estimate two new equations for Canadian non-commodity exports (NCX) that incorporate three important changes relative to the current equation used at the Bank of Canada.
November 16, 2016

Follow the Money: A Canadian Perspective on Financial Globalization

Remarks Timothy Lane Centre for International Governance Innovation (CIGI) Waterloo, Ontario
Deputy Governor Timothy Lane discusses the benefits and challenges of international capital mobility.
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