Roger Farmer, Giovanni Nicolò, 20 May 2019

The economies of many countries are operating close to full capacity, but unemployment and inflation are both low. Using data from the US, UK and Canada, this column compares differences in the macroeconomic behaviour of real GDP, the inflation rate and the yields on three-month Treasury securities in the three countries. It shows that the Farmer monetary model, closed with a belief function, outperforms the New Keynesian model, closed with the New Keynesian Phillips curve. The data fit the multiple equilibria emphasised in the Farmer model well, rather than the mean-reverting processes assumed by the New Keynesian model. 

Pierre Siklos, Samantha St. Amand, Joanna Wajda, 16 December 2018

There is an ongoing debate regarding how far central bankers, as unelected technocrats, should go outside of their remit when communicating in public fora. This column uses a machine-learning algorithm to assess the topics of speeches by officials at the US Federal Reserve and Bank of Canada over the last two decades. It concludes that the topics of central bankers’ speeches have not significantly widened in scope relative to their mandate documents.

Kristian Behrens, Brahim Boualam, Julien Martin, 03 January 2018

Policymakers strive to encourage resilience among firms. We often assume that industry clustering creates resistance to shocks. This column uses the evidence from Chinese imports in the Canadian textile industry to show that firms in clusters were in fact no more resilient to the ‘China shock’.

Kristian Behrens, Théophile Bougna, Mark Brown, 05 March 2015

Transport costs fell precipitously during the last century leading many observers to posit that the world has ‘become flat’. If this were true, the costs of transporting goods should no longer have much bearing on firms’ location choices and the spatial structure of economic activity. This column, using manufacturing data for Canada from 1990 to 2008, argues that despite a decline in geographical concentration of industries, location patterns still change with fluctuations in transport costs.

Holger Breinlich, Alejandro Cuñat, 07 September 2013

Recent development of heterogeneous firm models in international trade were built on the observation that extensive margin effects are important in explaining the trade and productivity effects of trade liberalisation. This columns adds that if we want to use the current generation of heterogeneous firm models for the purpose of forecasting the effects of trade agreements, we need to allow not only for sources of within-industry but also within-firm productivity increases.

Roland Beck, Arnaud Mehl, 26 July 2013

The intensification of the crisis has led to concerns about a possible shortage of global safe assets. At the same time, major reserve-currency issuers are losing their AAA-rating. This column considers new evidence on the recent rise of non-traditional currencies such as the Australian and Canadian dollars in global reserve portfolios. Evidence suggests that sovereign risk in advanced economies typically considered as safe is a key determinant of the growing importance of non-traditional reserve currencies.

Anke Kessler, Tom Cornwall, 06 June 2012

Does misinformation demobilise the electorate? Measuring the impact of alleged ‘robocalls’ on voter turnout in the 2011 Canadian federal election.

Florian Mölders, Ulrich Volz, 23 March 2012

The Trans-Pacific Partnership is back on course having received interest from the Canada, Japan, and Mexico in recent months. This column argues that as changes to the TPP start to seem more likely, there may be trade effects in anticipation. In the face of potential trade diversion, the column urges European trade policymakers to strengthen the EU’s trading ties with the Asia-Pacific region, preferably by reviving global trade talks.

Cédric Tille, Linda Goldberg, 02 December 2009

The international transmission of exchange rate movements depends on which currencies are used for the invoicing of international trade. This column presents transaction-level evidence on how exporters choose their invoicing currency. Industry structure, macroeconomic volatility, and the bargaining strength of the importing firm affect invoicing choices.

Rocco Huang , Lev Ratnovski, 25 August 2009

Why have Canadian banks fared better during the crisis than their OECD peers? This column attributes their stability to their reliance on depository funding rather than more risky wholesale funding. It recommends a Pigouvian tax penalising banks using excessive short-term wholesale funding.

Johannes Van Biesebroeck, 10 February 2009

Following the US bailout of the automotive industry, Canada is now bailing out its own auto firms, lest they risk southward migration. However, this column shows that this most recent action only continues a long history of lavish subsidies for the auto industry. Are governments giving away money for nothing?


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