Linear and Threshold Forecasts of Output and Inflation with Stock and Housing Prices

The authors examine whether simple measures of Canadian equity and housing price misalignments contain leading information about output growth and inflation. Previous authors have found that the information content of asset prices in general, and equity and housing prices in particular, are unreliable in that they do not systematically predict future economic activity or inflation. However, earlier studies relied on simple linear relationships that would fail to pick up the potential non-linear effects of asset-price misalignments. The authors' results suggest that housing prices are useful for predicting GDP growth, even within a linear context. Moreover, both stock and housing prices can improve inflation forecasts, especially when using a threshold specification. These improvements in forecast performance are relative to the information contained in Phillips-curve type indicators for inflation and IS-curve type indicators for GDP growth.Inflation and prices; Business fluctuations and cycles

The Evolving Financial System and Public Policy: Conference Highlights and Lessons

At the 12th annual Bank of Canada economic conference, held in Ottawa on 4 and 5 December 2003, representatives from various public and private organizations and Bank of Canada staff discussed papers presented on three key issues affecting the financial system: financial contagion, the implications of bank diversification, and financial sector regulation. Papers on financial contagion studied the effect of globalization on Canadian foreign-asset exposures, developed a general-equilibrium model of a competitive interfirm lending market in which firms can borrow or lend, and used market-based indicators to determine the probability that contagion can be generated by interbank exposures. The papers on bank diversification focused on the links between the changing behaviour of financial institutions and risk-return trade-offs. Issues of financial sector regulation included the relationship between governance and financial sector soundness, the theoretical basis of bank regulations for capital requirements, and the implications of bank capital requirements for the transmission of monetary policy. A panel discussion provided extended discussion of the conference papers.

Bank of Canada Liquidity Actions in Response to the Financial Market Turmoil

In response to the financial crisis of 2007-09, the Bank of Canada intervened repeatedly to stabilize the financial system and limit the repercussions of the crisis on the Canadian economy. This article reviews the extraordinary liquidity measures taken by the Bank during this period and the principles that guided the Bank's interventions. A preliminary assessment of the term liquidity facilities provided by the Bank suggests that they were an important source of liquidity support for some financial institutions and, on a broader basis, served to reduce uncertainty among market participants about the availability of liquidity, as well as helping to promote a return to well-functioning money markets.

Another Look at the Inflation-Target Horizon

The conduct of monetary policy within an inflation-targeting framework requires the establishment of an inflation-target horizon, which is the average time it takes inflation to return to the target. Policy-makers have an interest in communicating this horizon, since it is likely to help anchor inflation expectations. This article focuses on the determination of the appropriate policy horizon by reporting on two recent Bank of Canada studies. The evidence suggests that the current target horizon of six to eight quarters remains appropriate. It is important to note that the duration of the optimal inflation-target horizon varies widely, depending on the combination of shocks to the economy. In rare cases when the financial accelerator is triggered by a persistent shock, such as an asset-price bubble, it may be appropriate to take a longer view of the inflation-target horizon.

Does Financial Structure Matter for the Information Content of Financial Indicators?

Of particular concern to monetary policy-makers is the considerable unreliability of financial variables for predicting GDP growth and inflation. As Stock and Watson (2003) find, some financial variables work well in some countries or over some time periods and forecast horizons, but the results do not show any clear pattern. This may be caused by the changing nature of financial structures within countries across time, or the differing types of financial structures across countries. The authors assess the extent to which financial structure across countries influences the information content of financial variables for predicting real GDP growth and inflation. Their assumption is that financial asset prices will dominate financial quantities in economies with highly developed market-based financial systems. The authors use standard methods to determine the predictive content of common financial asset prices and quantities for 29 countries. They find no systematic pattern between financial structure and whether financial asset prices or quantities are the best financial indicators for monetary policy. Importantly, financial quantities are sometimes the best financial indicator, even in economies with highly developed market-based financial systems. The authors conclude that it would be difficult to tell, a priori, whether a financial asset price or quantity would be the best indicator for monetary policy for a particular country at a particular point in time.Inflation and prices; Business fluctuations and cycles; Credit and credit aggregates; Monetary aggregates; Interest rates

Making sense of trust and control in local authorities: An hermeneutic study.

The consequences of senior managers' assumptions about trust and control not only risk undermining their organization's trust-building efforts, they also risk work taking place to strengthen control leading to a growth of distrust in the organization. This not only means the organization failing in its ambitions to build a culture of trust, it makes it harder to deliver the wider programme of change.This is a reflexive hermeneutic study from a critical perspective exploring how senior managers make sense of the relationship between trust and control in an organizational setting. It also explores the assumptions held by senior managers about trust together with the assumptions held about control. The research covers the period from early 2009 to late 2010 and includes fieldwork carried out in a single local authority. The evidence is taken from interview conversations with ten senior managers from the local authority.The research reveals senior managers experience a dynamic and interactive relationship between trust and control. Whilst some senior managers understand that trust-building is undermined by strengthening controls it is the unexpected assumptions about control and distrust, common to all the senior managers, that poses the greater risk to trust-building efforts. In making sense of trust it is also necessary for organizations to understand assumptions held about distrust, particularly with regard to the relationship with assumptions about control. This research highlights that organizations face a challenge, often unacknowledged or unrecognized, in the need to continually balance (and rebalance) trust, control and distrust.The research also identifies that it is insufficient to understand senior managers as architects and implementers of control. Sense-making also needs to incorporate their reality as subjects, and sometimes even victims, of control. In considering such issues as trust and control organizations need to acknowledge that, even when common assumptions are held about the nature and value of such things, this in no way means that common views are held about the current reality in the organization. This research concludes that organizations need to move beyond 'one size fits all' approaches to change, to ones that understand employees as individuals rather than homogenous groupings and engage in dialogue that has cognizance of, and responsiveness to, local circumstances.This research also identifies several aspects of the role of the critical, reflexive researcher that have practical implications for the role of senior manager

Pore-Scale Characterization of Biogeochemical Controls on Iron and Uranium Speciation under Flow Conditions

Etched silicon microfluidic pore network models (micromodels) with controlled chemical and redox gradients, mineralogy, and microbiology under continuous flow conditions are used for the incremental development of complex microenvironments that simulate subsurface conditions. We demonstrate the colonization of micromodel pore spaces by an anaerobic Fe(III)-reducing bacterial species (Geobacter sulfurreducens) and the enzymatic reduction of a bioavailable Fe(III) phase within this environment. Using both Xray microprobe and X-ray absorption spectroscopy, we investigate the combined effects of the precipitated Fe(III) phases and the microbial population on uranium biogeochemistry under flow conditions. Precipitated Fe(III) phases within the micromodel were most effectively reduced in the presence of an electron shuttle (AQDS), and Fe(II) ions adsorbed onto the precipitated mineral surface without inducing any structural change. In the absence of Fe(III), U(VI) was effectively reduced by the microbial population to insoluble U(IV), which was precipitated in discrete regions associated with biomass. In the presence of Fe(III) phases, however, both U(IV) and U(VI) could be detected associated with biomass, suggesting reoxidation of U(IV) by localized Fe(III) phases. These results demonstrate the importance of the spatial localization of biomass and redox active metals, and illustrate the key effects of pore-scale processes on contaminant fate and reactive transport

A method for comparing multiple imputation techniques: A case study on the U.S. national COVID cohort collaborative.

Healthcare datasets obtained from Electronic Health Records have proven to be extremely useful for assessing associations between patients’ predictors and outcomes of interest. However, these datasets often suffer from missing values in a high proportion of cases, whose removal may introduce severe bias. Several multiple imputation algorithms have been proposed to attempt to recover the missing information under an assumed missingness mechanism. Each algorithm presents strengths and weaknesses, and there is currently no consensus on which multiple imputation algorithm works best in a given scenario. Furthermore, the selection of each algorithm’s pa- rameters and data-related modeling choices are also both crucial and challenging

Are fewer cases of diabetes mellitus diagnosed in the months after SARS-CoV-2 infection? A population-level view in the EHR-based RECOVER program

Long-term sequelae of severe acute respiratory coronavirus-2 (SARS-CoV-2) infection may include increased incidence of diabetes. Here we describe the temporal relationship between new type 2 diabetes and SARS-CoV-2 infection in a nationwide database. We found that while the proportion of newly diagnosed type 2 diabetes increased during the acute period of SARS-CoV-2 infection, the mean proportion of new diabetes cases in the 6 months post-infection was about 83% lower than the 6 months preinfection. These results underscore the need for further investigation to understand the timing of new diabetes after COVID-19, etiology, screening, and treatment strategies