Government Corruption and Foreign Direct Investment Under the Threat of Expropriation Staff Working Paper 2016-13 Christopher Hajzler, Jonathan Rosborough Foreign investment is often constrained by two forms of political risk: expropriation and corruption. We examine the role of government corruption in foreign direct investment (FDI) when contracts are not fully transparent and investors face the threat of expropriation. Content Type(s): Staff research, Staff working papers Topic(s): Development economics, Economic models, International topics JEL Code(s): F, F2, F21, F23, F3, F34
Dating Systemic Financial Stress Episodes in the EU Countries Staff Working Paper 2016-11 Benjamin Klaus, Tuomas Peltonen, Thibaut Duprey This paper introduces a new methodology to date systemic financial stress events in a transparent, objective and reproducible way. The financial cycle is captured by a monthly country-specific financial stress index. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Central bank research, Econometric and statistical methods, Economic models, Financial markets, Financial stability, Financial system regulation and policies, Monetary and financial indicators JEL Code(s): C, C5, C54, G, G0, G01, G1, G15
To Share or Not to Share? Uncovered Losses in a Derivatives Clearinghouse Staff Working Paper 2016-4 Radoslav Raykov This paper studies how the allocation of residual losses affects trading and welfare in a central counterparty. I compare loss sharing under two loss-allocation mechanisms – variation margin haircutting and cash calls – and study the privately and socially optimal degree of loss sharing. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Payment clearing and settlement systems JEL Code(s): G, G1, G19, G2, G21
What Is Behind the Weakness in Global Investment? Staff Discussion Paper 2016-5 Maxime Leboeuf, Robert Fay The recovery in private business investment globally remains extremely weak more than seven years after the financial crisis. This paper contributes to the ongoing policy debate on the factors behind this weakness by analyzing the role of growth prospects and uncertainty in explaining developments in non-residential private business investment in large advanced economies since the crisis. Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Central bank research, Domestic demand and components, Economic models, International topics, Monetary policy and uncertainty, Recent economic and financial developments JEL Code(s): C, C2, C23, C3, C33, D, D2, D24, D8, D80, D84, E, E2, E22, F, F0, F01, G, G3, G31
November 13, 2015 Innovation, Central-Bank Style Remarks Carolyn A. Wilkins Rotman School of Management and Munk School of Global Affairs Toronto, Ontario Senior Deputy Governor Wilkins discusses how the Bank is tackling the most important strategic challenges facing central banks today and how innovative thinking is critical to its success. Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Central bank research, Credibility, Economic models, Exchange rate regimes, Inflation targets, Monetary policy framework
Credit Conditions and Consumption, House Prices and Debt: What Makes Canada Different? Staff Working Paper 2015-40 John Muellbauer, Pierre St-Amant, David Williams There is widespread agreement that, in the United States, higher house prices raise consumption via collateral or possibly wealth effects. The presence of similar channels in Canada would have important implications for monetary policy transmission. Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Domestic demand and components, Economic models, Financial institutions, Financial stability, Financial system regulation and policies, Housing, Monetary policy transmission JEL Code(s): E, E0, E02, E2, E21, E4, E44, G, G2, G21, R, R2, R21, R3, R31
Public Policy Objectives and the Next Generation of CPA Systems: An Analytical Framework Staff Discussion Paper 2015-6 James Chapman, Jonathan Chiu, Sajjad Jafri, Héctor Pérez Saiz The payments landscape in Canada is rapidly changing and will continue to evolve, fuelled by strong and persistent drivers. In Canada, the Canadian Payments Association (CPA) is on a path to modernize Canada’s core payment systems. Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Financial services, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): E, E4, E42, L, L1, L14, L15, L5, L52
On the Welfare Cost of Rare Housing Disasters Staff Working Paper 2015-26 Shaofeng Xu This paper examines the welfare cost of rare housing disasters characterized by large drops in house prices. I construct an overlapping generations general equilibrium model with recursive preferences and housing disaster shocks. Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Economic models, Housing JEL Code(s): E, E2, E21, E4, E44, G, G1, G11, R, R2, R21
Managerial Compensation Duration and Stock Price Manipulation Staff Working Paper 2015-25 Josef Schroth I build a model of optimal managerial compensation where managers each have a privately observed propensity to manipulate short-term stock prices. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Labour markets, Recent economic and financial developments JEL Code(s): D, D8, D82, G, G1, G14, G3, G30, M, M1, M12
Productive Misallocation and International Transmission of Credit Shocks Staff Working Paper 2015-19 Yuko Imura, Julia Thomas We develop an asymmetric, two-country equilibrium business cycle model to study the role of international trade in transmitting and propagating the real effects of global financial shocks. Our model predicts that a recession in a large economy considerably alters a recession in its smaller trade partner, with distinct investment dynamics driving the transmission. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Financial markets, Financial stability, International topics JEL Code(s): E, E2, E22, E3, E32, E4, E44, F, F4, F41, F44