Producer Heterogeneity, Value-Added, and International Trade Staff Working Paper 2016-54 Patrick Alexander Standard new trade models depict producers as heterogeneous in total factor productivity. In this paper, I adapt the Eaton and Kortum (2002) model of international trade to incorporate tradable intermediate goods and producer heterogeneity in value-added productivity. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, International topics, Productivity, Trade integration JEL Code(s): F, F1, F11, F12, F14
Comparing Forward Guidance and Neo-Fisherianism as Strategies for Escaping Liquidity Traps Staff Analytical Note 2016-16 Robert Amano, Thomas J. Carter, Rhys R. Mendes What path should policy-makers select for the nominal rate when faced with a liquidity trap during which the effective lower bound binds? Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Economic models, Inflation and prices, Interest rates, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E4, E5
November 28, 2016 From Hewers of Wood to Hewers of Code: Canada’s Expanding Service Economy Remarks Stephen S. Poloz C.D. Howe Institute Toronto, Ontario Governor Stephen S. Poloz discusses how growth in Canada’s service sector is leading to high-paying jobs and helping complete the economic recovery. Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Central bank research, Economic models, Firm dynamics, Productivity, Recent economic and financial developments, Service sector
Business Cycles in Small, Open Economies: Evidence from Panel Data Between 1900 and 2013 Staff Working Paper 2016-48 Thuy Lan Nguyen, Wataru Miyamoto Using a novel data set for 17 countries dating from 1900 to 2013, we characterize business cycles in both small developed and developing countries in a model with financial frictions and a common shock structure. We estimate the model jointly for these 17 countries using Bayesian methods. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, International topics JEL Code(s): E, E1, E13, E3, E32, F, F4, F41, F44
Fragility of Resale Markets for Securitized Assets and Policy of Asset Purchases Staff Working Paper 2016-46 Martin Kuncl Markets for securitized assets were characterized by high liquidity prior to the recent financial crisis and by a sudden market dry-up at the onset of the crisis. A general equilibrium model with heterogeneous investment opportunities and information frictions predicts that, in boom periods or mild recessions, the degree of adverse selection in resale markets for securitized assets is limited because of the reputation-based guarantees by asset originators. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Economic models, Financial markets, Financial stability, Financial system regulation and policies JEL Code(s): E, E3, E32, E5, G, G0, G01, G2
Interpreting Volatility Shocks as Preference Shocks Staff Working Paper 2016-45 Shaofeng Xu This paper examines the relationship between volatility shocks and preference shocks in an analytically tractable endogenous growth model with recursive preferences and stochastic volatility. I show that there exists an explicit mapping between volatility shocks and preference shocks, and a rise in volatility generates the same impulse responses of macroeconomic aggregates as a negative preference shock. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): E, E2, E3
The Paul Storer Memorial Lecture—Cross-Border Trade Integration and Monetary Policy Staff Discussion Paper 2016-20 Stephen S. Poloz In this paper we explore the nexus between cross-border trade integration and monetary policy. We first review the evidence that trade liberalization has increased the degree of integration in North America and conclude that, while robust structural inferences remain elusive, there is sufficient supporting evidence for central banks to treat the issue seriously. Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Monetary policy, Trade integration JEL Code(s): E, E3, E37, E5, F, F1, F4, F41, F6
September 26, 2016 Cross-Border Trade Integration and Monetary Policy Lecture Stephen S. Poloz Western Washington University Bellingham, Washington Governor Stephen S. Poloz discusses global trade integration and the implications for the conduct of monetary policy. Content Type(s): Press, Speeches and appearances, Lectures Topic(s): Central bank research, Economic models, Monetary policy, Monetary policy implementation, Monetary policy transmission, Trade integration
A Primer on Neo-Fisherian Economics Staff Analytical Note 2016-14 Robert Amano, Thomas J. Carter, Rhys R. Mendes Conventional models imply that central banks aiming to raise inflation should lower nominal rates and thus stimulate aggregate demand. However, several economists have recently challenged this conventional wisdom in favour of an alternative “neo-Fisherian’’ view under which higher nominal rates might in fact lead to higher inflation. Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Economic models, Inflation and prices, Interest rates, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E4, E5
Implementing Cross-Border Interbank Lending in BoC-GEM-FIN Staff Discussion Paper 2016-19 Malik Shukayev, Argyn Toktamyssov BIS interbank lending data show that the Great Recession generated large and persistent changes in the international interbank lending positions of various countries. The main objective of this study is to understand the role of changes in international interbank credit flows in transmitting shocks across borders. Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Economic models, International topics JEL Code(s): E, E2, E27, E3, E37, F, F4, F47