Privacy as a Public Good: A Case for Electronic Cash Staff Working Paper 2019-24 Rodney J. Garratt, Maarten van Oordt Cash gives users a high level of privacy when making payments, but the use of cash to make payments is declining. People increasingly use debit cards, credit cards or other methods to pay. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Central bank research, Digital currencies and fintech, Payment clearing and settlement systems JEL Code(s): E, E4, E42, G, G2, G28
How Oil Supply Shocks Affect the Global Economy: Evidence from Local Projections Staff Discussion Paper 2019-6 Olivier Gervais We provide empirical evidence on the impact of oil supply shocks on global aggregates. To do this, we first extract structural oil supply shocks from a standard oil-price determination model found in the literature. Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, International topics JEL Code(s): C, C2, C22, C5, E, E3, E37, Q, Q4, Q43
The Effects of Inflation Targeting for Financial Development Staff Analytical Note 2019-21 Geoffrey R. Dunbar, Amy (Qijia) Li The adoption of inflation targeting (IT) by central banks leads to an increase of 10 to 20 percent in measures of financial development, with a lag. We also find evidence that the financial sector benefits of IT adoption were higher for early-adopting central banks. Content Type(s): Staff research, Staff analytical notes Topic(s): Financial institutions, Inflation targets, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E58
Central Bank Communication That Works: Lessons from Lab Experiments Staff Working Paper 2019-21 Oleksiy Kryvtsov, Luba Petersen We use controlled laboratory experiments to test the causal effects of central bank communication on economic expectations and to distinguish the underlying mechanisms of those effects. In an experiment where subjects learn to forecast economic variables, we find that central bank communication has a stabilizing effect on individual and aggregate outcomes and that the size of the effect varies with the type of communication. Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy implementation, Monetary policy transmission JEL Code(s): C, C9, D, D8, D84, E, E3, E5, E52
Online Job Seekers in Canada: What Can We Learn from Bing Job Queries? Staff Analytical Note 2019-18 André Binette, Karyne B. Charbonneau, Nicholas Curtis, Gabriela Galassi, Scott Counts, Justin Cranshaw Labour markets in Canada and around the world are evolving rapidly with the digital economy. Traditional data are adapting gradually but are not yet able to provide timely information on this evolution. Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Labour markets, Monetary policy JEL Code(s): C, C8, C80, E, E2, E24, J, J2, J21
Bank Market Power and Central Bank Digital Currency: Theory and Quantitative Assessment Staff Working Paper 2019-20 Jonathan Chiu, Mohammad Davoodalhosseini, Janet Hua Jiang, Yu Zhu We show that issuing a deposit-like central bank digital currency (CBDC) with a proper interest rate would encourage banks to pay higher interest to keep their customers. Banks would then attract more deposits and offer more loans. Hence, a CBDC would not necessarily crowd out private banking. Content Type(s): Staff research, Staff working papers Topic(s): Digital currencies and fintech, Market structure and pricing, Monetary policy, Monetary policy framework JEL Code(s): E, E5, E50, E58
Assessing the Resilience of the Canadian Banking System Staff Analytical Note 2019-16 Charles Gaa, Xuezhi Liu, Cameron MacDonald, Xiangjin Shen The stability of the Canadian financial system, as well as its ability to support the Canadian economy, depends on the ability of financial institutions to absorb and manage major shocks. This is especially true for large banks, which perform services essential to the Canadian economy. Content Type(s): Staff research, Staff analytical notes Topic(s): Financial institutions, Financial stability JEL Code(s): C, C6, C63, E, E2, E27, E3, E37, E4, E44, G, G0, G01, G2, G21
Assessing Global Potential Output Growth: April 2019 Staff Analytical Note 2019-13 Fares Bounajm, Jean-Philippe Cayen, Michael Francis, Christopher Hajzler, Kristina Hess, Guillaume Poulin-Bellisle, Peter Selcuk This note presents the updated estimates of potential output growth for the global economy through 2021. Global potential output is expected to grow by 3.3 per cent per year over the projection horizon. Content Type(s): Staff research, Staff analytical notes Topic(s): International topics, Potential output, Productivity JEL Code(s): E, E1, E10, E2, E20, O, O4
Disentangling the Factors Driving Housing Resales Staff Analytical Note 2019-12 Mikael Khan, Taylor Webley We use a recently developed model and loan-level microdata to decompose movements in housing resales since 2015. We find that fundamental factors, namely housing affordability and full-time employment, have had offsetting effects on resales over our study period. Content Type(s): Staff research, Staff analytical notes Topic(s): Econometric and statistical methods, Financial stability, Financial system regulation and policies, Housing, Recent economic and financial developments JEL Code(s): C, C2, C22, E, E2, R, R2, R21
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 Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41