D - Microeconomics
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A Survey and Risk Analysis of Selected Non-Bank Retail Payments Systems
Payment services offered by non-banks have flourished in recent years. The author provides an overview of the different kinds of non-bank retail payments schemes currently available in Canada, illustrating each by focusing on a specific example. -
The Role of Foreign Exchange Dealers in Providing Overnight Liquidity
This paper illustrates that dealers in foreign exchange markets not only provide intraday liquidity, they are key participants in the provision of overnight liquidity. Dealing institutions receive compensation for holding undesired inventory balances in part from the information they receive in customer trades. -
Market Structure and the Diffusion of E-Commerce: Evidence from the Retail Banking Industry
This paper studies the role that market structure plays in affecting the diffusion of electronic banking. Electronic banking (and electronic commerce more generally) reduces the cost of performing many types of transactions for firms. -
Aggregate and Welfare Effects of Redistribution of Wealth Under Inflation and Price-Level Targeting
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. -
Inflation, Nominal Portfolios, and Wealth Redistribution in Canada
There is currently a policy debate on potential refinements to monetary policy regimes in countries with low and stable inflation such as the U.S. and Canada. For example, in Canada, a systematic review of the current inflation targeting framework is underway. -
On Portfolio Separation Theorems with Heterogeneous Beliefs and Attitudes towards Risk
The early work of Tobin (1958) showed that portfolio allocation decisions can be reduced to a two stage process: first decide the relative allocation of assets across the risky assets, and second decide how to divide total wealth between the risky assets and the safe asset. This so called twofund separation relies on special assumptions on either returns or preferences. -
Price Level versus Inflation Targeting under Model Uncertainty
The purpose of this paper is to make a quantitative contribution to the inflation versus price level targeting debate. It considers a policy-maker that can set policy either through an inflation targeting rule or a price level targeting rule to minimize a quadratic loss function using the actual projection model of the Bank of Canada (ToTEM). -
Understanding Productivity: A Review of Recent Technical Research
The authors provide an extensive review of the rapidly expanding research on productivity, both at the macro and micro levels. They focus primarily on papers written about Canada, but also draw on selected studies from other countries, especially the United States, where such work sheds important light on particular aspects of productivity growth. The authors […] -
Unsecured Debt, Consumer Bankruptcy, and Small Business
In this paper we develop a quantitative model of entrepreneurial activity (risk-taking) and consumer bankruptcy choices and use the model to study the effects of bankruptcy regulations on entrepreneurial activity, bankruptcy rate and welfare.