Technological Progress and Monetary Policy: Managing the Fourth Industrial Revolution Staff discussion paper 2019-11 Stephen S. Poloz This paper looks at the implications for monetary policy of the widespread adoption of artificial intelligence and machine learning, which is sometimes called the “fourth industrial revolution.” Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C5, E, E3, O, O1, O11, O3, O33 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Structural challenges, Digitalization and productivity
2018 Bitcoin Omnibus Survey: Awareness and Usage Staff discussion paper 2019-10 Christopher Henry, Kim Huynh, Gradon Nicholls, Mitchell Nicholson The Bank of Canada continues to use the Bitcoin Omnibus Survey (BTCOS) to monitor trends in Canadians’ awareness, ownership and use of Bitcoin. The most recent iteration was conducted in late 2018, following an 85 percent decline in the price of Bitcoin throughout the year. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C1, C12, E, E4, O, O5, O51 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech
Cashless Bank Branches in Canada Staff analytical note 2019-29 Walter Engert, Ben Fung Cashless or tellerless bank branches have proliferated in several countries in recent years. In a cashless bank branch, teller or counter services such as cash withdrawals, deposits and cheque-cashing are not available. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E41, E42, E5, E51 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech, Retail payments
The Economics of Cryptocurrencies—Bitcoin and Beyond Staff working paper 2019-40 Jonathan Chiu, Thorsten Koeppl Since the creation of Bitcoin in 2009, over 2,000 cryptocurrencies have been issued. We evaluate how well a cryptocurrency functions as a payment system. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E5, L, L5 Research Theme(s): Monetary policy, Monetary policy tools and implementation, Money and payments, Digital assets and fintech, Payment and financial market infrastructures
What Does Structural Analysis of the External Finance Premium Say About Financial Frictions? Staff working paper 2019-38 Jelena Zivanovic I use a structural vector autoregression (SVAR) with sign restrictions to provide conditional evidence on the behavior of the US external finance premium (EFP). The results indicate that the excess bond premium, a proxy for the EFP, reacts countercyclically to supply and monetary policy shocks and procyclically to demand shocks. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E4, E44 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission
Home Equity Extraction and Household Spending in Canada Staff analytical note 2019-27 Anson T. Y. Ho, Mikael Khan, Monica Mow, Brian Peterson We use rich microdata to measure home equity extraction in Canada and track its evolution over time. We find home equity extraction has been rising in recent years and has likely contributed materially to dynamics in household spending. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, D12, E, E2, E21, G, G2, G20 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting
The Intergenerational Correlation of Employment: Is There a Role for Work Culture? Staff working paper 2019-33 Gabriela Galassi, David Koll, Lukas Mayr We document a substantial positive correlation of employment status between mothers and their children in the United States, linking data from the National Longitudinal Survey of Youth 1979 (NLSY79) and the NLSY79 Children and Young Adults. After controlling for ability, education and wealth, a one-year increase in a mother’s employment is associated with six weeks more employment of her child on average. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E24, J, J2, J21, J22, J6, J62 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
A Comprehensive Evaluation of Measures of Core Inflation in Canada: An Update Staff discussion paper 2019-9 Helen Lao, Ceciline Steyn We provide an updated evaluation of the value of various measures of core inflation that could be used in the conduct of monetary policy. We find that the Bank of Canada’s current preferred measures of core inflation—CPI-trim, CPI-median and CPI-common—continue to outperform alternative core measures across a range of criteria. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E3, E31, E5, E52 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
Financial Frictions, Durable Goods and Monetary Policy Staff working paper 2019-31 Ugochi Emenogu, Leo Michelis Financial frictions affect how much consumers spend on durable and non-durable goods. Borrowers can face both loan-to-value (LTV) constraints and payment-to-income (PTI) constraints. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, E5, E52 Research Theme(s): Financial system, Household and business credit, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission
Bridging Canadian Business Lending and Market-Based Risk Measures Staff analytical note 2019-26 Guillaume Ouellet Leblanc, Maxime Leboeuf Lending to business is central to economic growth because it supports investment by firms. Knowing how market participants view risk in the financial system can give the Bank of Canada information about future growth in business loans. In this note, we look at three market-based risk measures and find that sudden increases in the perception of risk in the Canadian banking system are associated with a weaker outlook for business loans and real gross domestic product. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E3, E32, E4, E44, G, G1, G12 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Household and business credit