F42 - International Policy Coordination and Transmission

• Domestic and Multilateral Effects of Capital Controls in Emerging Markets

  Staff Working Paper 2015-37 Gurnain Pasricha, Matteo Falagiarda, Martin Bijsterbosch, Joshua Aizenman

  Using a novel data set on capital control actions in 17 emerging-market economies (EMEs) over the period 2001–11, we provide new evidence on domestic and multilateral (or spillover) effects of capital controls.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods, Financial system regulation and policies, International financial markets, International topics, Monetary policy framework JEL Code(s): F, F3, F32, F4, F41, F42, G, G1, G15

• International Spillovers of Policy Uncertainty

  Staff Working Paper 2014-57 Stefan Klößner, Rodrigo Sekkel

  Using the Baker et al. (2013) index of policy uncertainty for six developed countries, this paper estimates spillovers of policy uncertainty. We find that spillovers account for slightly more than one-fourth of the dynamics of policy uncertainty in these countries, with this share rising to one-half during the financial crisis.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods JEL Code(s): C, C3, D, D8, D80, F, F4, F42

• The Impact of U.S. Monetary Policy Normalization on Capital Flows to Emerging-Market Economies

  Staff Working Paper 2014-53 Tatjana Dahlhaus, Garima Vasishtha

  The Federal Reserve’s path for withdrawal of monetary stimulus and eventually increasing interest rates could have substantial repercussions for capital flows to emerging-market economies (EMEs).

  Content Type(s): Staff Research, Staff Working Papers Topic(s): International topics, Transmission of monetary policy JEL Code(s): C, C3, C32, E, E5, E52, F, F3, F33, F4, F42

• 13 November 2014 Spillover Effects of Quantitative Easing on Emerging-Market Economies

  Bank of Canada Review - Autumn 2014 Robert Lavigne, Subrata Sarker, Garima Vasishtha

  While quantitative easing (QE) in the United States likely increased capital flows to emerging-market economies (EMEs), putting upward pressure on asset prices and exchange rates, diverging fundamentals between advanced economies and EMEs were also important drivers. Evidence suggests that the benefits of QE to EMEs, in higher global demand and increased confidence, appear to outweigh the costs. When advanced economies begin to normalize monetary policy, the best defence for EMEs against any potential instability is likely to be further strengthening of their macroeconomic and financial policy frameworks.

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): International financial markets, International topics, Transmission of monetary policy JEL Code(s): E, E5, E52, E58, F, F3, F32, F4, F41, F42

• International Transmission Channels of U.S. Quantitative Easing: Evidence from Canada

  Staff Working Paper 2014-43 Tatjana Dahlhaus, Kristina Hess, Abeer Reza

  The U.S. Federal Reserve responded to the great recession by reducing policy rates to the effective lower bound. In order to provide further monetary stimulus, they subsequently conducted large-scale asset purchases, quadrupling their balance sheet in the process.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): International topics, Monetary policy framework, Transmission of monetary policy JEL Code(s): C, C3, C32, E, E5, E52, E58, F, F4, F42, F44

• International Business Cycles and Financial Frictions

  Staff Working Paper 2012-19 Wen Yao

  This paper builds a two-country DSGE model to study the quantitative impact of financial frictions on business cycle co-movements when investors have foreign asset exposure. The investor in each country holds capital in both countries and faces a leverage constraint on her debt.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Business fluctuations and cycles, International financial markets, International topics JEL Code(s): E, E3, E30, F, F4, F42, F44

• 17 May 2012 On the Adjustment of the Global Economy

  Bank of Canada Review - Spring 2012 Carlos De Resende, Claudia Godbout, René Lalonde, Eric Morin, Nikita Perevalov

  This article discusses three scenarios for the adjustment of the global economy. In a “baseline” scenario—which encompasses fiscal consolidation in major advanced economies, growth-friendly structural reforms in Europe and Japan, and greater exchange rate flexibility and reforms in the emerging-market economies of Asia to induce rotation of demand away from net exports—global current account imbalances […]

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Balance of payments and components, Exchange rates, Fiscal Policy, International topics, Recent economic and financial developments JEL Code(s): F, F3, F32, F37, F4, F42

• The Power of Many: Assessing the Economic Impact of the Global Fiscal Stimulus

  Staff Discussion Paper 2010-1 Carlos De Resende, René Lalonde, Stephen Snudden

  The Bank of Canada Global Economy Model (BoC-GEM) is used to examine the effect of various types of discretionary fiscal policies on different regions of the globe. The BoC-GEM is a microfounded dynamic stochastic general-equilibrium global model with six regions, multiple sectors, and international linkages.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Business fluctuations and cycles, Fiscal Policy, International topics, Recent economic and financial developments JEL Code(s): E, E5, E52, E58, E6, E61, E63, F, F4, F42

• Shift Contagion in Asset Markets

  Staff Working Paper 2003-5 Toni Gravelle, Maral Kichian, James Morley

  The authors develop a new methodology to investigate how crises cause the relationship between financial variables to change. Two possible sources of increased co-movement between markets during high-variance episodes are considered: larger common shocks operating through standard market linkages, and a structural change in the propagation of shocks between markets, called "shift contagion."

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods, Financial markets JEL Code(s): C, C3, C32, F, F4, F42, G, G1, G15

• The Resolution of International Financial Crises: Private Finance and Public Funds

  Staff Working Paper 2001-20 Andy Haldane, Mark Kruger

  Over the past year and a half, the Bank of England and the Bank of Canada have been developing a framework for the resolution of international financial crises that aligns incentives for all parties to deal with a crisis and preserve the integrity of the international financial system. The framework is built on principles, not rules.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): International topics JEL Code(s): F, F3, F34, F4, F42