February 24, 2023 The lifespan of a bank note At the Bank of Canada, we assessed the life cycle of bank notes to confirm that polymer notes have a smaller environmental footprint than paper notes. Polymer notes have a longer life and then are recycled. Content Type(s): Background materials Topic(s): Bank notes
A central bank digital currency for offline payments Staff Analytical Note 2023-2 Cyrus Minwalla, John Miedema, Sebastian Hernandez, Alexandra Sutton-Lalani Offline functionality is a key consideration for a potential CBDC. We describe the different types of offline functionality based on their duration outside of network connection—either intermittent (for short periods) or extended (for longer periods). We discuss the advantages and drawbacks of each and consider implications for end-user devices, system resilience and universal accessibility. Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Digital currencies and fintech JEL Code(s): E, E4, E42, E5, E51, E58, O, O3, O31
February 24, 2023 Bank of Canada announces 2022–23 scholarship recipients Media Relations Ottawa, Ontario The Bank of Canada is pleased to announce this year’s recipients of its scholarship awards for students with disabilities, Indigenous students, LGBTQ2S+ students, francophones and students who identify as a woman or as a member of a visible minority or racialized group. Content Type(s): Press, Press releases Source(s): Scholarship awards
On the Fragility of DeFi Lending Staff Working Paper 2023-14 Jonathan Chiu, Emre Ozdenoren, Kathy Yuan, Shengxing Zhang We develop a dynamic model to capture key features of decentralized finance lending. We identify a price-liquidity feedback: the market outcome in any given period depends on agents' expectations about lending activities in future periods, with higher future price expectations leading to more lending and higher prices in that period. Content Type(s): Staff research, Staff working papers Topic(s): Digital currencies and fintech, Financial stability JEL Code(s): G, G0, G01, G1, G10
The Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model Staff Discussion Paper 2023-5 Martin Kuncl, Dmitry Matveev We use a small open economy model with overlapping generations to evaluate secular dynamics of the neutral rate in Canada from 1980 to 2018. We find that changes in both foreign and domestic factors resulted in a protracted decline in the neutral rate. Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E2, E21, E22, E4, E43, E5, E50, E52, E58, F, F4, F41
Learning in a Complex World: Insights from an OLG Lab Experiment Staff Working Paper 2023-13 Cars Hommes, Stefanie J. Huber, Daria Minina, Isabelle Salle This paper brings novel insights into group coordination and price dynamics in complex environments. We implement a chaotic overlapping-generation model in the lab and find that group coordination is always on the steady state or on the two-cycle and that behavior is non-monotonic. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): C, C6, C62, C68, C9, C91, C92, E, E1, E13, E7, E70, G, G1, G12, G4, G41