Interest rates

• Estimating the Policy Rule from Money Market Rates when Target Rate Changes Are Lumpy

  Staff Working Paper 2012-41 Jean-Sébastien Fontaine

  Most central banks effect changes to their target or policy rate in discrete increments (e.g., multiples of 0.25%) following public announcements on scheduled dates. Still, for most applications, researchers rely on the assumption that the policy rate changes linearly with economic conditions and they do not distinguish between dates with and without scheduled announcements.

  Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Financial markets, Interest rates JEL Code(s): E, E4, E43, E44, E47, G, G1, G12, G13

• Consumer Interest Rates and Retail Mutual Fund Flows

  Staff Working Paper 2012-39 Jesus Sierra

  This paper documents a link between the real and financial sides of the economy. We find that retail equity mutual fund flows in Canada are negatively related to current and past changes in a component of the prime and 5-year mortgage rates that is uncorrelated with government rates.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial services, Interest rates JEL Code(s): G, G2, G21, G23