D - Microeconomics

• How big is cash-futures basis trading in Canada’s government bond market?

  Staff Analytical Note 2024-16 Andreas Uthemann, Rishi Vala

  Cash-futures basis trading has grown alongside the Government of Canada bond futures market. We examine this growth over time in relation to Government of Canada bond and repurchase agreement markets and provide details on the type of market participants that engage in this type of trading activity.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Financial institutions, Financial markets, Financial stability, Market structure and pricing JEL Code(s): D, D4, D47, D5, D53, G, G1, G12, G2, G23

• Central Bank Liquidity Policy in Modern Times

  Staff Discussion Paper 2024-6 Skylar Brooks

  Across several dimensions of lender of last resort policy, I highlight broad changes that have occurred since the 2008–09 global financial crisis and discuss some of the key challenges, choices and considerations facing the designers of central bank liquidity tools today.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Financial institutions, Financial markets, Financial stability, Lender of last resort JEL Code(s): D, D5, D53, E, E5, E58, E6, E61, G, G0, G01, G2, G21, G23, H, H1, H12

• Impacts of interest rate hikes on the consumption of households with a mortgage

  Staff Analytical Note 2024-14 Panagiotis Bouras, Joaquín Saldain, Xing Guo, Thomas Michael Pugh, Maria teNyenhuis

  We assess how much the recent rate-hike cycle has and will affect mortgage borrowers' consumption through its impacts on mortgage payments. Our analysis provides insights into the effects of changes in monetary policy on the consumption of mortgage borrowers.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Interest rates, Monetary policy, Recent economic and financial developments JEL Code(s): D, D1, D13, E, E2, E21, G, G5

• The Role of Beliefs in Entering and Exiting the Bitcoin Market

  Staff Working Paper 2024-22 Daniela Balutel, Christopher Henry, Jorge Vásquez, Marcel Voia

  We develop a model that links investors’ decisions to enter or exit the Bitcoin market with their beliefs about the survival of Bitcoin. Empirical testing using Canadian data reveals that beliefs strongly influence both entries and exits, and this impact varies with time and ownership status.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): D, D8, D83, E, E4, E41, O, O3, O33

• Saving after Retirement and Preferences for Residual Wealth

  Staff Working Paper 2024-21 Giulio Fella, Martin B. Holm, Thomas Michael Pugh

  We estimate a model of households in Norway with bequest motives, health-dependent utility, and uncertain longevity and health. Our estimates imply strong bequest motives for households both with and without offspring. We interpret this as suggestive evidence that utility from residual wealth represents forces beyond an altruistic bequest motive.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Housing, Labour markets JEL Code(s): D, D1, D11, D12, D14, E, E2, E21