Forward Guidance at the Effective Lower Bound: International Experience Staff Discussion Paper 2015-15 Karyne B. Charbonneau, Lori Rennison Forward guidance is one of the policy tools that a central bank can implement if it seeks to provide additional monetary stimulus when it is operating at the effective lower bound (ELB) on interest rates. It became more widely used during and after the global financial crisis. Content Type(s): Staff research, Staff discussion papers Topic(s): Monetary policy and uncertainty, Monetary policy communications, Monetary policy framework, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E4, E43, E5, E52, E58, E6
Quantitative Easing as a Policy Tool Under the Effective Lower Bound Staff Discussion Paper 2015-14 Abeer Reza, Eric Santor, Lena Suchanek This paper summarizes the international evidence on the performance of quantitative easing (QE) as a monetary policy tool when conventional policy rates are constrained by the effective lower bound (ELB). A large body of evidence suggests that expanding the central bank’s balance sheet through large-scale asset purchases can provide effective stimulus under the ELB. Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, International topics, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E61, E65, N, N1, N10
The International Experience with Negative Policy Rates Staff Discussion Paper 2015-13 Harriet Jackson A key issue in the renewal of the inflation-control agreement is the question of the appropriate level of the inflation target. Many observers have raised concerns that with the reduction in the neutral rate, and the experience of the recent financial crisis, the effective lower bound (ELB) is more likely to be binding in the future if inflation targets remain at 2 per cent. Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Financial markets, International topics, Monetary policy framework JEL Code(s): E, E5, E52, E58, E6, E65
Risk Sharing in the Presence of a Public Good Staff Working Paper 2015-27 Josef Schroth This paper studies an economy where agents can spend resources on consuming a private good and on funding a public good. There is asymmetric information regarding agents’ relative preference for private versus public good consumption. Content Type(s): Staff research, Staff working papers Topic(s): Financial stability, Financial system regulation and policies, Fiscal policy JEL Code(s): D, D8, D82, D86, E, E6, E62, H, H2, H21, H23, H7, H77
Addressing Household Indebtedness: Monetary, Fiscal or Macroprudential Policy? Staff Working Paper 2014-58 Sami Alpanda, Sarah Zubairy In this paper, we build a dynamic stochastic general-equilibrium model with housing and household debt, and compare the effectiveness of monetary policy, housing-related fiscal policy, and macroprudential regulations in reducing household indebtedness. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial system regulation and policies, Housing, Monetary policy transmission JEL Code(s): E, E5, E52, E6, E62, R, R3, R38
Integrating Uncertainty and Monetary Policy-Making: A Practitioner’s Perspective Staff Discussion Paper 2014-6 Stephen S. Poloz This paper discusses how central banking is evolving in light of recent experience, with particular emphasis on the incorporation of uncertainty into policy decision-making. Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Financial stability, Monetary policy and uncertainty, Monetary policy communications, Monetary policy framework JEL Code(s): C, C5, C50, E, E3, E37, E5, E6, E61
Housework and Fiscal Expansions Staff Working Paper 2014-34 Stefano Gnocchi, Daniela Hauser, Evi Pappa We build an otherwise-standard business cycle model with housework, calibrated consistently with data on time use, in order to discipline consumption-hours complementarity and relate its strength to the size of fiscal multipliers. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Fiscal policy JEL Code(s): E, E2, E24, E3, E32, E5, E52, E6, E62
November 14, 2013 Assessing Financial System Vulnerabilities: An Early Warning Approach Bank of Canada Review - Autumn 2013 Gurnain Pasricha, Tom Roberts, Ian Christensen, Brad Howell This article focuses on a quantitative method to identify financial system vulnerabilities, specifically, an imbalance indicator model (IIM) and its application to Canada. An IIM identifies potential vulnerabilities in a financial system by comparing current economic and financial data with data from periods leading up to past episodes of financial stress. It complements other sources of information - including market intelligence and regular monitoring of the economy - that policy-makers use to assess vulnerabilities. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Econometric and statistical methods, Financial stability, Monetary and financial indicators JEL Code(s): E, E6, E66, G, G0, G01
Housing and Tax Policy Staff Working Paper 2013-33 Sami Alpanda, Sarah Zubairy In this paper, we investigate the effects of housing-related tax policy measures on macroeconomic aggregates using a dynamic general-equilibrium model. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Housing JEL Code(s): E, E6, E62, H, H2, H24, R, R3, R38
Analyzing Fiscal Sustainability Staff Working Paper 2013-27 Huixin Bi, Eric M. Leeper The authors study the implications of fiscal policy behaviour for sovereign risk in a framework that determines a country’s fiscal limit, the point at which, for economic or political reasons, taxes and spending can no longer adjust to stabilize debt. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy JEL Code(s): E, E6, E62, E65, H, H6, H63