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Uninsurable Investment Risks and Capital Income Taxation
Meh, Césaire A.; Terajima, Yaz - Bank of Canada - 2009
This paper studies the capital accumulation and welfare implications of reducing capital income taxation in a general …
Persistent link: https://www.econbiz.de/10005808306
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Are Distorted Beliefs Too Good to be True?
Misina, Miroslav - Bank of Canada - 2003
Mark (2000) relax the assumption of rational expectations and in its place use the assumption of distorted beliefs. The …
Persistent link: https://www.econbiz.de/10005673366
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Consumer Attitudes and the Epidemiology of Inflation Expectations
Ehrmann, Michael; Pfajfar, Damjan; Santoro, Emiliano - Bank of Canada - 2014
This paper studies the formation of consumers’ inflation expectations using micro-level data from the Michigan Survey …. It shows that beyond the well-established socio-economic determinants of inflation expectations such as gender, income or …. Respondents with current or expected financial difficulties, pessimistic attitudes about major purchases, or expectations that …
Persistent link: https://www.econbiz.de/10010783636
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Risk Perceptions and Attitudes
Misina, Miroslav - Bank of Canada - 2005
Changes in risk perception have been used in various contexts to explain shorter-term developments in financial markets, as part of a mechanism that amplifies fluctuations in financial markets, as well as in accounts of "irrational exuberance." This approach holds that changes in risk perception...
Persistent link: https://www.econbiz.de/10005808296
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Expectations and Monetary Policy: Experimental Evidence
Kryvtsov, Oleksiy; Petersen, Luba - Bank of Canada - 2013
The effectiveness of monetary policy depends, to a large extent, on market expectations of its future actions. In a … standard New Keynesian business-cycle model with rational expectations, systematic monetary policy reduces the variance of … inflation and the output gap by at least two-thirds. These stabilization benefits can be substantially smaller if expectations …
Persistent link: https://www.econbiz.de/10010713920
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Bond liquidity premia
Fontaine, Jean-Sébastien; Garcia, René - 2009
Recent asset pricing models of limits to arbitrage emphasize the role of funding conditions faced by financial intermediaries. In the US, the repo market is the key funding market. Then, the premium of on-the-run U.S. Treasury bonds should share a common component with risk premia in other...
Persistent link: https://www.econbiz.de/10003933337
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Why Do Emerging Markets Liberalize Capital Outflow Controls? Fiscal versus Net Capital Flow Concerns
Aizenman, Joshua; Pasricha, Gurnain - Bank of Canada - 2013
In this paper, we provide empirical evidence on the factors that motivated emerging economies to change their capital outflow controls in recent decades. Liberalization of capital outflow controls can allow emerging-market economies (EMEs) to reduce net capital inflow (NKI) pressures, but may...
Persistent link: https://www.econbiz.de/10010849944
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The Neutral Rate of Interest in Canada
Mendes, Rhys R. - Bank of Canada - 2014
A measure of the neutral policy interest rate can be used to gauge the stance of monetary policy. We define the neutral rate as the real policy rate consistent with output at its potential level and inflation equal to target after the effects of all cyclical shocks have dissipated. This is a...
Persistent link: https://www.econbiz.de/10010960403
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An International Dynamic Term Structure Model with Economic Restrictions and Unspanned Risks
Bauer, Gregory H.; Rios, Antonio Diez de los - Bank of Canada - 2012
We construct a multi-country affine term structure model that contains unspanned macroeconomic and foreign exchange risks. The canonical version of the model is derived and is shown to be easy to estimate. We show that it is important to impose restrictions (including global asset pricing, carry...
Persistent link: https://www.econbiz.de/10009493657
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Money Market Rates and Retail Interest Regulation in China: The Disconnect between Interbank and Retail Credit Conditions
Porter, Nathan; Xu, TengTeng - Bank of Canada - 2013
Interest rates in China are composed of a mix of both market-determined interest rates (interbank rates and bond yields), and regulated interest rates (retail lending and deposit rates), reflecting China’s gradual process of interest rate liberalization. This paper investigates the main...
Persistent link: https://www.econbiz.de/10010670841