Business fluctuations and cycles

• Labor Mobility in a Monetary Union

  Staff Working Paper 2019-15 Daniela Hauser, Martin Seneca

  The optimal currency literature has stressed the importance of labor mobility as a precondition for the success of monetary unions. But only a few studies formally link labor mobility to macroeconomic adjustment and policy. In this paper, we study macroeconomic dynamics and optimal monetary policy in an economy with cyclical labor flows across two distinct regions that share trade links and a common monetary framework.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Labour markets, Monetary policy framework, Regional economic developments JEL Code(s): E, E3, E32, E5, E52, F, F4

• The Trend Unemployment Rate in Canada: Searching for the Unobservable

  Staff Working Paper 2019-13 Dany Brouillette, Marie-Noëlle Robitaille, Laurence Savoie-Chabot, Pierre St-Amant, Bassirou Gueye, Elise Nelson

  In this paper, we assess several methods that have been used to measure the Canadian trend unemployment rate (TUR). We also consider improvements and extensions to some existing methods.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Inflation and prices, Labour markets JEL Code(s): C, C5, C52, C53, E, E2, E24, E27

• Inflation Targeting and Liquidity Traps Under Endogenous Credibility

  Staff Working Paper 2019-9 Cars Hommes, Joep Lustenhouwer

  Policy implications are derived for an inflation-targeting central bank, whose credibility is endogenous and depends on its past ability to achieve its targets. This is done in a New Keynesian framework with heterogeneous and boundedly rational expectations.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credibility, Monetary policy JEL Code(s): C, C6, C62, E, E3, E32, E5, E52
• February 21, 2019

  Price check: Inflation in Canada

  Sharon Kozicki, Jill Vardy, Laurence Savoie-Chabot

  Why prices change, and what it means for the economy.

  Content Type(s): Publications, The Economy, Plain and Simple Topic(s): Business fluctuations and cycles, Credibility, Expectations, Inflation and prices, Inflation targets, Inflation: costs and benefits, Monetary policy framework, Monetary policy transmission, Price stability

• Macroprudential Policy with Capital Buffers

  Staff Working Paper 2019-8 Josef Schroth

  The countercyclical capital buffer is part of Basel III, the set of regulatory measures developed in response to the financial crisis of 2007–09. This study focuses on how time-varying capital buffers can address inefficiencies in economies with endogenous financial crises.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Credit risk management, Financial stability, Financial system regulation and policies, Lender of last resort JEL Code(s): E, E1, E13, E3, E32, E4, E44
• January 31, 2019

  Making cents of wages

  

  Russell Barnett, José Dorich

  Ever wonder how your wages are determined? You’re not the only one who cares about your wages. At the Bank of Canada, we care about them a lot too.

  Content Type(s): Publications, The Economy, Plain and Simple Topic(s): Business fluctuations and cycles, Firm dynamics, Labour markets, Productivity
• January 31, 2019

  A Look Under the Hood of Canada’s Job Market

  Remarks Carolyn A. Wilkins Toronto Region Board of Trade Toronto, Ontario

  Senior Deputy Governor Carolyn A. Wilkins discusses developments in the Canadian labour market and factors that may help explain why wage growth is slower than expected.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Business fluctuations and cycles, Inflation and prices, Labour markets, Productivity, Regional economic developments, Service sector

• Corporate Debt Composition and Business Cycles

  Staff Working Paper 2019-5 Jelena Zivanovic

  Based on empirical evidence, I propose a dynamic stochastic general equilibrium model with two financial sectors to analyze the role of corporate debt composition (bank versus bond financing) in the transmission of economic shocks.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Financial institutions, Financial markets, Recent economic and financial developments JEL Code(s): E, E3, E32, E4, E44

• The Role of Corporate Saving over the Business Cycle: Shock Absorber or Amplifier?

  Staff Working Paper 2018-59 Xiaodan Gao, Shaofeng Xu

  We document countercyclical corporate saving behavior with the degree of countercyclicality varying nonmonotonically with firm size. We then develop a dynamic stochastic general equilibrium model with heterogeneous firms to explain the pattern and study its implications for business cycles.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): E, E2, E20, E22, E3, E32, G, G3, G31, G32

• GDP by Industry in Real Time: Are Revisions Well Behaved?

  Staff Analytical Note 2018-40 Patrick Rizzetto

  The monthly data for real gross domestic product (GDP) by industry are used extensively in real time both to ground the Bank of Canada’s monitoring of economic activity and in the Bank’s nowcasting tools, making these data one of the most important high-frequency time series for Canadian nowcasting.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, Central bank research, Econometric and statistical methods JEL Code(s): C, C5, C53, C8, C82, E, E0, E01