Monetary Policy

• The Effect of Mortgage Rate Resets on Debt: Evidence from TransUnion (Part I)

  Staff Analytical Note 2020-2 Katya Kartashova

  This note studies how decreases in mortgage rates affect the behaviour of borrowers in terms of spending on durable goods and repaying debt.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Credit and credit aggregates, Housing, Interest rates, Monetary Policy, Transmission of monetary policy JEL Code(s): D, D1, D12, D14, E, E4, E43, E5, E52, G, G2, G21, R, R3, R31

• The Power of Helicopter Money Revisited: A New Keynesian Perspective

  Staff Discussion Paper 2020-1 Thomas J. Carter, Rhys R. Mendes

  We analyze money financing of fiscal transfers (helicopter money) in two simple New Keynesian models: a “textbook” model in which all money is non-interest-bearing (e.g., all money is currency), and a more realistic model with interest-bearing reserves.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Credibility, Economic models, Fiscal Policy, Inflation targets, Interest rates, Monetary Policy, Monetary policy framework, Transmission of monetary policy, Uncertainty and monetary policy JEL Code(s): E, E1, E12, E4, E41, E43, E5, E51, E52, E58, E6, E61, E63
• January 30, 2020

  How vulnerabilities like debt can affect interest rates

  Paul Beaudry Laval University Québec, Québec

  Deputy Governor Paul Beaudry explains to students at Laval University why financial vulnerabilities—such as household debt—are important for the Bank of Canada when it sets interest rates.

  Content Type(s): Press, Speeches Topic(s): Central bank research, Credit risk management, Financial stability, Inflation targets, Interest rates, Monetary Policy, Monetary policy framework, Monetary policy implementation
• January 30, 2020

  Monetary Policy and Financial Vulnerabilities

  Remarks Paul Beaudry Université Laval Québec, Québec

  Deputy Governor Paul Beaudry discusses how financial vulnerabilities present a challenge for monetary policy.

  Content Type(s): Press, Speeches Topic(s): Central bank research, Credit risk management, Financial stability, Inflation targets, Interest rates, Monetary Policy, Monetary policy framework, Monetary policy implementation

• Managing GDP Tail Risk

  Staff Working Paper 2020-3 Thibaut Duprey, Alexander Ueberfeldt

  Models for macroeconomic forecasts do not usually take into account the risk of a crisis—that is, a sudden large decline in gross domestic product (GDP). However, policy-makers worry about such GDP tail risk because of its large social and economic costs.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Central bank research, Economic models, Financial stability, Financial system regulation and policies, Interest rates, Monetary Policy, Monetary policy framework JEL Code(s): D, D8, E, E4, E44, E5, E52, E58, G, G0, G01

• Social Learning and Monetary Policy at the Effective Lower Bound

  Staff Working Paper 2020-2 Jasmina Arifovic, Alex Grimaud, Isabelle Salle, Gauthier Vermandel

  This research develops a model in which the economy is directly influenced by how pessimistic or optimistic economic agents are about the future. The agents may hold different views and update them as new economic data become available.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Business fluctuations and cycles, Central bank research, Credibility, Economic models, Monetary Policy, Monetary policy communications JEL Code(s): C, C8, C82, E, E3, E32, E5, E52

• Monetary Policy and Government Debt Dynamics Without Commitment

  Staff Working Paper 2019-52 Dmitry Matveev

  I show that maturity considerations affect the optimal conduct of monetary and fiscal policy during a period of government debt reduction. I consider a New Keynesian model and study a dynamic game of monetary and fiscal policy authorities without commitment, characterizing the incentives that drive the choice of interest rate.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Fiscal Policy, Monetary Policy JEL Code(s): E, E5, E52, E6, E62, E63

• Furor over the Fed : Presidential Tweets and Central Bank Independence

  Staff Analytical Note 2019-33 Antoine Camous, Dmitry Matveev

  We illustrate how market data can be informative about the interactions between monetary and fiscal policy. Federal funds futures are private contracts that reflect investor’s expectations about monetary policy decisions.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Central bank research, Credibility, Financial markets, Monetary Policy JEL Code(s): E, E4, E44, E5, E52, E58

• Changing Fortunes: Long-Termism—G-Zero, Artificial Intelligence and Debt

  Staff Discussion Paper 2019-12 Stephen S. Poloz

  This paper discusses three long-term forces that are acting on the global economy and their implications for companies and policy-makers.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Financial stability, International topics, Monetary Policy, Trade Integration, Uncertainty and monetary policy JEL Code(s): E, E6, E63, F, F0, F02, F1, F15, F5, F53, F6, H, O, O1, O11, O3, O33
• December 5, 2019

  Economic Progress Report: Charting Our Own Course

  Remarks Timothy Lane Ottawa Board of Trade Ottawa, Ontario

  Deputy Governor Timothy Lane talks about the different monetary policy paths taken by Canada and the United States over the last decade and reviews the Bank of Canada’s latest interest rate decision.

  Content Type(s): Press, Speeches Topic(s): Monetary Policy, Monetary policy framework, Recent economic and financial developments