Economic models

• Technology Adoption in Input-Output Networks

  Staff Working Paper 2019-51 Xintong Han, Lei Xu

  We study how input-output networks affect the speed of technology adoption. In particular, we model the decision to adopt the programming language Python 3 by software packages. Python 3 provides advanced features but is not backward compatible with Python 2, which implies it comes with adoption costs.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Economic models, Firm dynamics, Productivity JEL Code(s): C, C6, C61, L, L2, L23, L8, L86, O, O1, O14, O3, O33

• Monetary Payoff and Utility Function in Adaptive Learning Models

  Staff Working Paper 2019-50 Erhao Xie

  When players repeatedly face an identical or similar game (e.g., coordination game, technology adoption game, or product choice game), they may learn through experience to perform better in the future. This learning behaviour has important economic implications.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods, Economic models JEL Code(s): C, C5, C57, C7, C72, C9, C92

• Model Uncertainty and Wealth Distribution

  Staff Working Paper 2019-48 Edouard Djeutem, Shaofeng Xu

  This paper studies the implications of model uncertainty for wealth distribution in a tractable general equilibrium model with a borrowing constraint and robustness à la Hansen and Sargent (2008). Households confront model uncertainty about the process driving the return of the risky asset, and they choose robust policies.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Asset Pricing, Business fluctuations and cycles, Economic models JEL Code(s): D, D3, D8, E, E2
• December 12, 2019

  The Bank of Canada’s plans for 2020

  Stephen S. Poloz Empire Club of Canada Toronto, Ontario

  In his traditional year-end speech, Governor Stephen S. Poloz described some of the long-term forces affecting the global and Canadian economies that will shape the Bank’s work in 2020.

  Content Type(s): Press, Speeches Topic(s): Digital Currencies and Fintech, Economic models, Inflation targets, International topics, Monetary policy framework, Productivity
• December 12, 2019

  Big Issues Ahead: The Bank’s 2020 Vision

  Remarks Stephen S. Poloz Empire Club of Canada Toronto, Ontario

  Governor Stephen S. Poloz discusses how long-term global economic forces will drive the Bank of Canada’s work agenda in 2020 and beyond.

  Content Type(s): Press, Speeches Topic(s): Digital Currencies and Fintech, Economic models, Inflation targets, International topics, Monetary policy framework, Productivity

• Technological Progress and Monetary Policy: Managing the Fourth Industrial Revolution

  Staff Discussion Paper 2019-11 Stephen S. Poloz

  This paper looks at the implications for monetary policy of the widespread adoption of artificial intelligence and machine learning, which is sometimes called the “fourth industrial revolution.”

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Economic models, Financial stability, Monetary policy framework, Uncertainty and monetary policy JEL Code(s): C, C5, E, E3, O, O1, O11, O3, O33

• What Does Structural Analysis of the External Finance Premium Say About Financial Frictions?

  Staff Working Paper 2019-38 Jelena Zivanovic

  I use a structural vector autoregression (SVAR) with sign restrictions to provide conditional evidence on the behavior of the US external finance premium (EFP). The results indicate that the excess bond premium, a proxy for the EFP, reacts countercyclically to supply and monetary policy shocks and procyclically to demand shocks.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Economic models, Financial markets, Recent economic and financial developments JEL Code(s): E, E3, E32, E4, E44

• The Simple Economics of Global Fuel Consumption

  Staff Working Paper 2019-35 Doga Bilgin, Reinhard Ellwanger

  This paper presents a structural framework of the global oil market that relies on information on global fuel consumption to identify flow demand for oil. We show that under mild identifying assumptions, data on global fuel consumption help to provide comparatively sharp insights on elasticities and other key structural parameters of the global oil market.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Economic models JEL Code(s): C, C5, C51, L, L7, L71, Q, Q4, Q41, Q43

• The Intergenerational Correlation of Employment: Is There a Role for Work Culture?

  Staff Working Paper 2019-33 Gabriela Galassi, David Koll, Lukas Mayr

  We document a substantial positive correlation of employment status between mothers and their children in the United States, linking data from the National Longitudinal Survey of Youth 1979 (NLSY79) and the NLSY79 Children and Young Adults. After controlling for ability, education and wealth, a one-year increase in a mother’s employment is associated with six weeks more employment of her child on average.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods, Economic models, Labour markets JEL Code(s): E, E2, E24, J, J2, J21, J22, J6, J62

• Are Long-Horizon Expectations (De-)Stabilizing? Theory and Experiments

  Staff Working Paper 2019-27 George Evans, Cars Hommes, Bruce McGough, Isabelle Salle

  Most models in finance assume that agents make trading plans over the infinite future. We consider instead that they are boundedly rational and may only form forecasts over a limited horizon.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Asset Pricing, Central bank research, Economic models, Financial markets JEL Code(s): C, C9, C92, D, D8, D84, E