Bank of Canada

The Distributional Consequences of Commodity Booms

This paper examines the response of income inequality to commodity price shocks and identifies the underlying mechanisms at play. I provide novel cross-country evidence from commodity-exporting nations, showing that positive commodity price shocks reduce labor income inequality b...

Canada’s Cross-Border Carry Trade

Canada has been spending more than its national income for much of the period since the Global Financial Crisis, relying for this on net financing from rest of the world. Yet Canada’s foreign asset position has grown substantially than its foreign liabilities despite these defici...

Offshoring and Voting Patterns in the US

This paper studies the impact of offshoring by US firms on voting patterns in the US. Using county-level voting data combined with industry-level offshoring data from 2000 to 2020, we ask whether an increase in employment at foreign affiliates of US multinational firms in vertica...

Auction Timing Under Limited Information: Evidence from Sovereign Bond Auctions

This paper examines how auction timing may affect sovereign issuance outcomes through its interaction with market volatility. Using Canada as a case study, it shows that: (1) higher same-day bond market volatility is associated with larger auction tails, indicating weaker demand...

How Costly Are Cross-Border Payments for Firms?

How costly are cross-border payments for firms? Using proprietary FXC Intelligence data on quoted prices for Canadian business-to-business cross-border payments, this note documents three empirical facts. First, cross-border payment costs for firms are costly: banks charge sender...

Money Creation for Crypto Space: Stablecoins or Central Bank Digital Currencies?

Stablecoins are the current go-to digital money to settle transactions on the blockchain. We explore the implications of introducing competing tokenized public digital monies (i.e., tokenized central bank digital currencies (CBDCs)). When they pay a moderate interest rate and gua...

How Do Households Respond to Expected Inflation? An Investigation of Transmission Mechanisms,

Abstract We investigate the channels through which inflation expectations affect household spending by conducting surveys featuring hypothetical scenarios involving an increase in inflation expectations. Most households did not adjust their current spending plans, often because t...

Household food inflation in Canada

Abstract We study household‐level food inflation rates during low‐inflation, pandemic and postpandemic inflation surge periods using Canadian homescan data for 2012Q4–2023Q4. Our results about household inflation rates during low inflation are consistent with evidence for the Uni...