September 15, 2008 Offshoring and Its Effects on the Labour Market and Productivity: A Survey of Recent Literature Bank of Canada Review - Autumn 2008 James Rossiter, Yi Zheng, Calista Cheung Offshoring has become an increasingly prominent aspect of the globalization process. Evidence over the past two decades suggests that offshoring has not exerted a noticeable impact on overall employment and earnings growth in advanced economies, but it has likely contributed to shifting the demand for labour towards higher-skilled jobs. There appear to be some positive effects of offshoring on productivity, but such effects differ by country. Content Type(s): Publications, Bank of Canada Review articles Topic(s): International topics, Labour markets, Productivity
September 15, 2008 Adjusting to the Commodity-Price Boom: The Experiences of Four Industrialized Countries Bank of Canada Review - Autumn 2008 Michael Francis Between 2002 and 2008, global commodity prices rose to unprecedented levels. This article examines the process of adjustment to the commodity boom in four industrialized, commodity-exporting countries (Australia, Canada, New Zealand, and Norway). The article focuses on both the direct adjustment within the commodity-producing sectors (via increased employment and capital spending) and the indirect adjustment in the macro economy. The analysis finds that the indirect adjustment process, which was triggered by the increase in incomes that the commodity-price boom generated, has been the most important part of the adjustment in all four economies. Through this channel, aggregate demand rose, exchange rates appreciated, and adjustment was facilitated in other sectors, such as manufacturing and construction. Content Type(s): Publications, Bank of Canada Review articles Topic(s): International topics, Recent economic and financial developments
September 15, 2008 The Effects of Recent Relative Price Movements on the Canadian Economy Bank of Canada Review - Autumn 2008 David Dupuis, Philippe Marcil Although the standard of living of Canadians has improved as a result of terms-of-trade gains created by the sharp rise in real commodity prices over the past five years or so, the commodity-price increase, combined with an exchange rate appreciation and real income gain, triggered structural adjustments by altering underlying economic incentives. The frictions generated in adjusting to the relative price shock have likely contributed to hold back aggregate productivity growth. Dupuis and Marcil examine the structural adjustments that have been required-in particular, the resource reallocation among the different sectors of the economy-and its effects on employment, output, and productivity, as well as the responses of final domestic demand and external trade flows. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Productivity, Recent economic and financial developments
September 15, 2008 The Bank of Canada's Senior Loan Officer Survey Bank of Canada Review - Autumn 2008 Umar Faruqui, Paul Gilbert, Wendy Kei The Bank of Canada maintains regular contact with financial institutions as part of the information-gathering process that feeds into the larger set of information used to arrive at its monetary policy decision. Since 1999, the Bank has been conducting a quarterly survey of the business-lending practices of major Canadian financial institutions. Analysis of the information collected shows that it is correlated with future growth in both credit and business investment. This article focuses on how the survey is conducted and describes the construction of the summary statistics, highlighting the key statistical relationships in the historical survey data. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial institutions, Monetary and financial indicators, Recent economic and financial developments
September 12, 2008 Fixed Income Markets Conference held on 12 and 13 September 2008 (papers in unedited, electronic format only) Content Type(s): Conferences and workshops
Aggregate and Welfare Effects of Redistribution of Wealth Under Inflation and Price-Level Targeting Staff Working Paper 2008-31 Césaire Meh, José-Víctor Ríos-Rull, Yaz Terajima Since the work of Doepke and Schneider (2006a) and Meh and Terajima (2008), we know that inflation causes major redistribution of wealth – between households and the government, between nationals and foreigners, and between households within the same country. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Inflation and prices, Inflation targets, Inflation: costs and benefits, Monetary policy framework, Sectoral balance sheet JEL Code(s): D, D3, D31, E, E2, E21, E3, E31, E4, E44, E5, E52, E6, E63
September 11, 2008 Change in Eligibility Requirements for Asset-Backed Commercial Paper (ABCP) Accepted as Collateral for the Bank of Canada's Standing Liquidity Facility Since August 2007, the Bank of Canada has undertaken a number of initiatives to support its ability to provide liquidity to the financial system. Content Type(s): Press, Market notices
September 11, 2008 Bank of Canada Review - Autumn 2008 Cover page Leonard C. Wyon: Canada’s Victorian Engraver Photography by Gord Carter Content Type(s): Publications, Bank of Canada Review
Non-Linearities, Model Uncertainty, and Macro Stress Testing Staff Working Paper 2008-30 Miroslav Misina, David Tessier A distinguishing feature of macro stress testing exercises is the use of macroeconomic models in scenario design and implementation. It is widely agreed that scenarios should be based on "rare but plausible" events that have either resulted in vulnerabilities in the past or could do so in the future. Content Type(s): Staff research, Staff working papers Topic(s): Financial stability JEL Code(s): C, C1, C15, G, G2, G21, G3, G33
Macroeconomic Determinants of the Term Structure of Corporate Spreads Staff Working Paper 2008-29 Jun Yang We investigate the macroeconomic determinants of corporate spreads using a no-arbitrage technique. Structural shocks are identified by a New-Keynesian model. Treasury bonds are priced in an affine model with time-varying risk premia. Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Financial markets, Interest rates JEL Code(s): E, E4, E43, E44, G, G1, G12