Showing papers by "Government of Canada published in 2014"
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TL;DR: This article found that the impact of bank-oriented economies on economic growth has been three times more severe than market-oriented ones when recessions have coincided with financial crises, and the impact on GDP has been twice as severe for bank oriented economies as it has for market oriented ones.
Abstract: Up to a point, banks and markets both foster economic growth. Beyond that limit, expanded bank lending or market-based financing no longer adds to real growth. But when it comes to moderating business cycle fluctuations, banks and markets differ considerably in their effects. In normal downturns, healthy banks help to cushion the shock but, when recessions have coincided with financial crises, we find that the impact on GDP has been three times as severe for bank-oriented economies as it has for market-oriented ones.
119 citations
TL;DR: In this article, the authors investigated the determinants in migrants' choice of payment channel when transferring money to relatives abroad and found that people who regularly use internet banking for other purposes are more likely to use bank services for remittances as well.
Abstract: This paper investigates the determinants in migrants’ choice of payment channel when transferring money to relatives abroad. We surveyed 1,680 migrants in the Netherlands, identifying five remittance channels: bank services, money transfer operator (MTO) services, in-cash transfers via informal intermediaries, ATM cash withdrawals abroad and carrying cash when travelling back home. To the best of our knowledge, we are the first to present evidence of the role played by general payment habits: migrants who regularly use internet banking for other purposes are more likely to use bank services for remittances as well. However, we also demonstrate that other important drivers exist in determining the choice of payment channels, such as personal characteristics and country-specific factors, (perceived) costs, ease of use and the availability of remittance options. Based on our findings, we suggest that financial education, cost reduction and new (mobile) remittance solutions may serve a valuable role.
42 citations
TL;DR: In this article, the authors measure consumers' use of cash by harmonizing payment diary surveys from seven countries, including Canada, Australia, Austria, France, Germany and the Netherlands, and find that the use of Cash is strongly correlated with transaction size, demographics, and point of-sale characteristics such as merchant card acceptance and venue.
Abstract: We measure consumers’ use of cash by harmonizing payment diary surveys from seven countries. The seven diary surveys were conducted in 2009 (Canada), 2010 (Australia), 2011 (Austria, France, Germany and the Netherlands), and 2012 (the United States). Our paper finds cross-country differences – for example, the level of cash usage differs across countries. Cash has not disappeared as a payment instrument, especially for low-value transactions. We also find that the use of cash is strongly correlated with transaction size, demographics, and point-of-sale characteristics such as merchant card acceptance and venue.
30 citations
TL;DR: In this paper, the authors disentangle two dimensions of banks' systemic risk: the level of bank tail risk and the linkage between a bank's risk and severe shocks in the financial system.
Abstract: In this study we disentangle two dimensions of banks’ systemic risk: the level of bank tail risk and the linkage between a bank’s tail risk and severe shocks in the financial system. We employ a measure of the systemic risk of financial institutions that can be decomposed into two subcomponents reflecting these dimensions. Empirically, we show quantitatively how bank characteristics are related to bank tail risk and systemic linkage. The interrelationship between bank characteristics and these dimensions determine the relation between bank characteristics and systemic risk. Certain characteristics that are irrelevant to the soundness of a financial institution taken in isolation turn out to be important for the level of systemic risk, and vice versa. Our analytical framework helps to evaluate differences in direction and scope of policy under the micro- and macro-prudential objectives of regulation.
30 citations
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TL;DR: In this paper, the authors use a two-step approach to characterize the evolution of US macroeconomic and financial variables during episodes of very high uncertainty using a regime-switching model.
Abstract: This paper uses a two-step approach to characterize the evolution of US macroeconomic and financial variables during episodes of very high uncertainty. First, we identify episodes of very high uncertainty using a regime-switching model. Second, we assess the behaviour of macroeconomic and financial variables during these episodes of very high uncertainty. This methodology is analogous to the approach followed by Baele et al. (2013), who study episodes of flights to safety in financial markets. We find that very high uncertainty episodes are associated with a weaker growth performance and sharp declines in stock prices. However, we find that this relation is non-linear in that uncertainty does not seem to matter during periods characterized by medium or low uncertainty.
27 citations
TL;DR: In this paper, the Bank of Canada's Credit Rating Assessment Group (CRAG) has developed a comprehensive database of sovereign defaults posted on the bank of Canada website, including bonds and other marketable securities, bank loans, and official loans.
Abstract: Until recently, there have been few efforts to systematically measure and aggregate the nominal value of the different types of sovereign government debt in default. To help fill this gap, the Bank of Canada’s Credit Rating Assessment Group (CRAG) has developed a comprehensive database of sovereign defaults posted on the Bank of Canada’s website. Our database draws on previously published data sets compiled by various official and private sector sources. It combines elements of these, together with new information, to develop estimates of stocks of government obligations in default, including bonds and other marketable securities, bank loans, and official loans in default, valued in U.S. dollars, for the years 1975 to 2013 on both a country-by-country and a global basis. CRAG’s new database, and subsequent updates, will be useful to researchers analyzing the economic and financial effects of individual sovereign defaults and, importantly, the impact on global financial stability of episodes involving multiple sovereign defaults.
26 citations
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TL;DR: In this article, the authors study rollover risk in the wholesale funding market when intermediaries can hold liquidity ex-ante and are subject to fire sales ex-post, and demonstrate that precautionary liquidity restores multiple equilibria in a global rollover game.
Abstract: I study rollover risk in the wholesale funding market when intermediaries can hold liquidity ex-ante and are subject to fire sales ex-post. I demonstrate that precautionary liquidity restores multiple equilibria in a global rollover game. An intermediate liquidity level supports both the usual run equilibrium and an efficient equilibrium. I provide a uniqueness refinement to characterize the privately optimal liquidity choice. Because of fire sales, liquidity holdings are strategic substitutes. Intermediaries free-ride on the liquidity of other intermediaries, causing excessive liquidation. A macro-prudential authority internalizes the systemic nature of liquidity and restores constrained efficiency by imposing a macro-prudential liquidity buffer.
19 citations
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TL;DR: In 2004, Canada changed the eligibility rules for its Scientific Research and Experimental Development (SRED) tax credit, which provides tax incentives for R&D conducted by small private firms.
Abstract: In 2004, Canada changed the eligibility rules for its Scientific Research and Experimental Development (SRED) tax credit, which provides tax incentives for R&D conducted by small private firms. Difference in difference estimates show a seventeen percent increase in total R&D among eligible firms. The impact was larger for firms that took the tax credits as refunds because they had no current tax liability. Contract R&D expenditures were more elastic than the R&D wage bill. The response was also greater for firms that invested in R&D capital before the policy change.
17 citations
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TL;DR: The use of payment cards, either debit or credit, is becoming more and more widespread in developed economies as discussed by the authors. Nevertheless, the use of cash remains significant in many developed economies.
Abstract: The use of payment cards, either debit or credit, is becoming more and more widespread in developed economies. Nevertheless, the use of cash remains significant.
13 citations
TL;DR: In this article, a three-component scattering model is used to quantify the sensitivity of radar incidence angle over snow-covered landfast first-year sea ice (FYI) during the late winter season.
Abstract: In this study we examine the utility of a three-component scattering model to quantify the sensitivity of radar incidence angle over snow-covered landfast first-year sea ice (FYI) during the late winter season. This three-component scattering model is based on (1) surface scattering contributed from the snow-covered FYI (smooth-ice (SI), rough-ice (RI), and deformed-ice (DI) types); (2) volume scattering contributed from snow layers which consist of enlarged snow grains, elevated brine volume, and preferential orientation of snow grains relative to radar look direction, as well as the underlying sea ice; and (3) double-bounce scattering contributed from ice ridges and ice fragments. This study uses RADARSAT-2 C-band polarimetric synthetic aperture radar (POLSAR) data acquired on 15 and 18 May 2009 for Hudson Bay, near Churchill, during late winter with surface air temperatures ≤−8°C at two different incidence angles (29° and 39°). The three-component scattering model is used to discriminate between snow-c...
13 citations
TL;DR: In this article, the authors explore the implications of recent developments in firm-based trade theory and empirics for trade policy and negotiations, and they describe insights from this reformulation of theory and the empirical literature that illuminates it.
Abstract: This paper explores the implications of recent developments in firm-based trade theory and empirics for trade policy and negotiations. While traditional trade theory focused on the country, and the new trade theory of the 1980’s adopted the industry as the unit for analysis, the newest theory emphasizes the role of firms and firm heterogeneity in international trade. We describe insights from this reformulation of theory and the empirical literature that illuminates it. The realities of trade as now understood show the need for a new new trade policy. Evaluating trade at the level of the firm implies that overcoming firm-level fixed costs of trade and reducing uncertainty lead to increased trade along margins that generate the highest productivity, innovation, and welfare gains. The traditional market access agenda ought now to be less important on the multilateral agenda than services, standards, trade facilitation, procurement, and innovation policy. The analytical needs of a new new trade policy require new models and more access to firm-level data to formulate and evaluate the multi-faceted impacts of trade policy.
TL;DR: In this paper, the authors found that recent efforts aimed at stimulating both domestic and foreign investment have attached great importance to the improvement of the regulatory framework and institutions of e.g., financial institutions.
Abstract: This research found that recent efforts aimed at stimulating both domestic and foreign investment have attached great importance to the improvement of the regulatory framework and institutions of e...
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TL;DR: In this paper, the authors analyzed the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel, and they found that credit rating downgrades are associated with an immediate and persistent decline in access to noncore deposits and wholesale funding, especially during the global financial crisis.
Abstract: We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis. This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency.
TL;DR: In this paper, the authors developed a simulation model to test whether standard implications of the theory on cash management and payment choices can explain the use of payment instruments by transaction size, using diary survey data from Canada, France, Germany and the Netherlands.
Abstract: Despite various payment innovations, today, cash is still heavily used to pay for low-value purchases. This paper develops a simulation model to test whether standard implications of the theory on cash management and payment choices can explain the use of payment instruments by transaction size. In particular, using diary survey data from Canada, France, Germany and the Netherlands, we test the assumption that cash is still the most efficient payment instrument, and the idea that people hold cash for precautionary reasons when facing uncertainty about their future purchases. The results of the simulations show that these two factors are significant determinants of the high shares of low-value cash payments in Canada, France and Germany. Yet, they are not so crucial in the Netherlands, which exhibits a significant share of low-value card transactions. We discuss how the differences in payment markets across countries may explain the performance of the model.
TL;DR: In this paper, the authors developed and estimated a search and bargaining model designed to measure the welfare loss associated with frictions in oligopoly markets with negotiated prices, and used the model to quantify the consumer surplus loss induced by the presence of search frictions, and evaluate the relative importance of market power, inefficient allocation, and direct search costs in explaining the loss.
Abstract: This paper develops and estimates a search and bargaining model designed to measure the welfare loss associated with frictions in oligopoly markets with negotiated prices. We use the model to quantify the consumer surplus loss induced by the presence of search frictions in the Canadian mortgage market, and evaluate the relative importance of market power, inefficient allocation, and direct search costs in explaining the loss. Our results suggest that search frictions reduce consumer surplus by almost $20 per month on a $100,000 loan, and that 17% of this reduction can be associated with discrimination, 30% with inefficient matching, and the remainder with the search cost. In addition, we find that product differentiation attenuates the effect of search frictions by reducing the cost of gathering quotes and improving efficiency, while posted prices do so through the ability of the first-mover to price discriminate. In contrast, competition amplifies the welfare effect of search frictions. Despite this, the overall effect of competition is to increase aggregate consumer surplus and drive prices down, but these effects are not spread equally across consumers: those with low search costs benefit more from competition.
TL;DR: The results indicate that subjective health expectations do contain additional information that is not incorporated in subjective mortality expectations and that the rational expectations assumption cannot be rejected for subjective health Expectations.
Abstract: Subjective health expectations are derived using data from the Health and Retirement Study (HRS). We first use a Bayesian updating mechanism to correct for focal point responses and reporting errors of the original health expectations variable. We then test the quality of the health expectations measure and describe its correlation with various health indicators and other individual characteristics. Our results indicate that subjective health expectations do contain additional information that is not incorporated in subjective mortality expectations and that the rational expectations assumption cannot be rejected for subjective health expectations. Finally, the data suggest that individuals younger than 70 years of age seem to be more pessimistic about their health than individuals in their 70's.
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TL;DR: The authors assesses the effectiveness and associated externalities that arise when macro-prudential policies (MPPs) are used to manage international capital flows, using a sample of up to 139 countries, and examine the impact of eight different MPP measures on cross-border bank flows over the period 1999-2009.
Abstract: This paper assesses the effectiveness and associated externalities that arise when macroprudential policies (MPPs) are used to manage international capital flows. Using a sample of up to 139 countries, we examine the impact of eight different MPP measures on cross-border bank flows over the period 1999-2009.
TL;DR: In this paper, the authors studied the efficiency of financial intermediation through securitization with asymmetric information about the quality of securitized loans and showed that, in general, by providing reputation-based implicit recourse, the issuer of a loan can credibly signal its quality.
Abstract: This paper studies the efficiency of financial intermediation through securitization with asymmetric information about the quality of securitized loans. In this theoretical model, I show that, in general, by providing reputation-based implicit recourse, the issuer of a loan can credibly signal its quality. However, in boom stages of the business cycle, information on loan quality remains private, and lower quality loans accumulate on balance sheets. This deepens a subsequent downturn. The longer the duration of a boom, the deeper will be the fall of output in a subsequent recession. In recessions, the model also produces amplification of adverse selection problems on re-sale markets for securitized loans. These are especially severe after a prolonged boom period and when securitized loans of high quality are no longer traded. Finally, the model suggests that excessive regulation that requires higher explicit risk-retention by the originators of loans can adversely affect both quantity and quality of investment in the economy.
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TL;DR: The work in this paper surveys Canadian efforts at nationalisation or coordination of securities regulation over the last eight decades and compares these efforts with prior attempts to establish a national or common regulator, statute, or both.
Abstract: If securities regulation is any indication, few countries in the world take their federalism as seriously as Canada does. Notwithstanding an increasingly globalised world, the central reality of Canadian federalism will continue to influence the enactment and enforcement of effective capital markets regulation. In the latest development, on September 8, 2014 the federal government and four participating provinces announced draft legislation, including a new uniform provincial act and new federal legislation, to establish a new Cooperative Capital Markets Regulator (CCMR). Some provinces are strongly opposed, including Quebec, which has promised to challenge the proposed regime on constitutional grounds. This chapter surveys Canadian efforts at nationalisation or coordination of securities regulation over the last eight decades. This historical analysis locates current reform efforts in context and compares those efforts, in detail and on the merits, with prior attempts to establish a national or common regulator, statute, or both. The chapter considers the Supreme Court of Canada’s important 2011 decision in Reference re Securities Act, including the question of exactly what it might mean for the federal government to “manage systemic risk” in the capital markets. The chapter then assesses the options available after the Reference, including but not limited to the proposed CCMR, along with the political, administrative and political considerations that will affect any regime going forward. This is a draft chapter in the fifth edition of Securities Regulation in Canada, now forthcoming (2014).As Governor General of Canada, His Excellency David Johnston has refrained from expressing opinions on matters that are currently under public policy discussion. Any views or recommendations on policy changes in this chapter or in the text as a whole are those of Kathleen Rockwell and Cristie Ford, and should not be attributed to His Excellency. As well, the opinions stated here should not be taken to be those of anyone at the Alberta Securities Commission other than Kathleen Rockwell herself.
01 Jan 2014
TL;DR: Techniques that are serological, genome based, or detect volatile signatures can supplement morphological and visual identification as well as independently provide accurate identification of regulatory pests.
Abstract: Accurate identification of plant pests is essential to maintaining a successful plant biosecurity programme. Diagnostic methods and technologies used by national regulatory programmes (NPPOs), and associated laboratories for identification, are driven by method/protocol availability, taxonomy and biology of the pest, all informed by accurate reference collections and genetic databases. The ultimate selection and implementation of specific diagnostics for any programme is influenced by the unique circumstances faced by each plant protection organization. While regulatory diagnostics are used to protect agriculture and the environment, they also must be accomplished while maintaining open agricultural trade. Much information is needed to fit the diagnostic to its intended use and avoid improper use or assay failure. The components that currently drive method development and deployment of systems for regulatory identification and diagnosis include criteria for method selection, development, and transfer to the field. Diagnostic methods that are developed using quality management guidelines and appropriate validation strategies can produce universally acceptable results for regulatory decisions. Technologies that are serological, genome based, or detect volatile signatures can supplement morphological and visual identification as well as independently provide accurate identification of regulatory pests. Each NPPO continues to evolve its utility to pest detection by advancing new technologies such as DNA barcodes, recombinant DNA produced monoclonal antibodies, and novel ways of detecting targeted nucleic acids. Use of two or more assays to fulfill regulatory requirements adds diversity for cross-checking and accountability of the results when high-consequence regulatory decisions are made.
TL;DR: The authors revisited Goldstein and Pauzner (2005) and showed that, in the optimal demand-deposit contract subject to sequential service, banks hold safe assets to insure investors against investment risk.
Abstract: We revisit Goldstein and Pauzner (2005) and show that, in the optimal demand-deposit contract subject to sequential service, banks hold safe assets to insure investors against investment risk. Consequently, fewer investors withdraw prematurely, which reduces the probability of a bank run. Safe asset holdings increase investor welfare and may increase the bank's provision of liquidity.
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TL;DR: For example, this paper found that the married have a less deep U-shape in life satisfaction across age groups than do the unmarried, indicating that marriage may help ease the causes of the mid-life dip in the life satisfaction and that the benefits of marriage are unlikely to be short-lived.
Abstract: Subjective well-being research has often found that marriage is positively correlated with well-being. Some have argued that this correlation may be result of happier people being more likely to marry. Others have presented evidence suggesting that the well-being benefits of marriage are short-lasting. Using data from the British Household Panel Survey, we control individual pre-marital well-being levels and find that the married are still more satisfied, suggesting a causal effect, even after full allowance is made for selection effects. Using new data from the United Kingdom's Annual Population Survey, we find that the married have a less deep U-shape in life satisfaction across age groups than do the unmarried, indicating that marriage may help ease the causes of the mid-life dip in life satisfaction and that the benefits of marriage are unlikely to be short-lived. We explore friendship as a mechanism which could help explain a causal relationship between marriage and life satisfaction, and find that well-being effects of marriage are about twice as large for those whose spouse is also their best friend. Finally, we use the Gallup World Poll to show that although the overall well-being effects of marriage appear to vary across cultural contexts, marriage eases the middle-age dip in life evaluations for all regions except Sub-Saharan Africa.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
TL;DR: I would like to address some of the inaccurate and misleading assertions Stanbrook made in his editorial in CMAJ about refugees accessing primary and preventive care.
Abstract: I would like to address some of the inaccurate and misleading assertions Stanbrook made in his editorial in CMAJ .[1][1]
Stanbrook states “that the cuts to health coverage have, in particular, denied refugees access to primary and preventive care.” That is absolutely false. Through the Interim
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TL;DR: This paper reviewed existing studies of the links between good governance and subjective well-being and found that people are more satisfied with their lives in countries with better governance quality, but also that actual changes in governance quality since 2005 have led to large changes in the quality of life.
Abstract: This paper first reviews existing studies of the links between good governance and subjective well-being. It then brings together the largest available sets of national-level measures of the quality of governance to assess the extent to which they contribute to explaining the levels and changes in life evaluations in 157 countries over the years 2005-2012, using data from the Gallup World Poll. The results show not just that people are more satisfied with their lives in countries with better governance quality, but also that actual changes in governance quality since 2005 have led to large changes in the quality of life. For example, the ten-most-improved countries, in terms of delivery quality changes between 2005 and 2012, when compared to the ten countries with most worsened delivery quality, are estimated to have thereby increased average life evaluations by as much as would be produced by a 40% increase in per capita incomes. The results also confirm earlier findings that the delivery quality of government services generally dominates democratic quality in supporting better lives. The situation changes as development proceeds, with democratic quality having a positive influence among countries that have already achieved higher quality of service delivery.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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TL;DR: In this paper, the authors analyzed the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel, and they found that credit rating downgrades are associated with an immediate and persistent decline in access to noncore deposits and wholesale funding, especially during the global financial crisis.
Abstract: We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis. This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency.
TL;DR: In this article, the authors analyse the dynamics resulting from social learning in a simple general equilibrium (GE) model, whose structure is similar to the one underlying macroeconomic models of the New Macroeconomic Synthesis.
Abstract: We analyse the dynamics resulting from social learning in a simple general equilibrium (GE) model, whose structure is similar to the one underlying macroeconomic models of the New Macroeconomic Synthesis. The economy is composed by households and firms who exchange labour and consumption goods in the corresponding markets with potential rationing. Market interactions are modelled through an Agent-Based Model (ABM), in which heterogeneous agents operate under bounded rationality and social learning. We discuss the robustness of the symmetric optimal equilibrium of this GE model, by testing the ability of agents to coordinate on it through this learning scheme in the absence of substantive rationality and perfect information. Our results indicate that one needs to "discipline" social learning in order to obtain realistic dynamics out of this simple model. However, full coordination of agents on this equilibrium remains hard to obtain, and social welfare loss remains. Our results are quite robust and do not depend on our specific modelling assumptions.
TL;DR: The Women Writing Women Collective (WWWC) as mentioned in this paper was a group of women who gathered on a monthly basis to share their writing, and provided a sounding board for each other as they engaged with writing and scholarship.
Abstract: The Women Writing Women Collective was a collegial and collaborative response to the isolation that is often experienced by women scholars as they pursue their academic careers. For 5 years, a group of women gathered on a monthly basis to share their writing. In doing so, the group members provided a sounding board for each other as they engaged with writing and scholarship through reflective, reciprocal, and responsible critique and curiosity. As a writing collective, we began to recognize and deconstruct specific institutional constraints, practices, and theoretical stances that had influenced our perspectives and experiences of what it means to be women writing in the academy. Within this process of critical reflective practice, our scholarship, our writing, and our sense of community was strengthened. Within this article, we share our experiences of women writing and learning together
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TL;DR: In this article, the authors explore two special challenges indigenous peoples pose to the idea of sovereigns as trustees for humanity: the first challenge is rooted in a colonial history during which a trusteeship model of sovereignty served as an enabler of paternalistic colonial policies.
Abstract: We explore two special challenges indigenous peoples pose to the idea of sovereigns as trustees for humanity The first challenge is rooted in a colonial history during which a trusteeship model of sovereignty served as an enabler of paternalistic colonial policies The challenge is to show that the trusteeship model is not irreparably colonial in nature The second challenge, which emerges from the first, is to specify the scope and nature of indigenous people's sovereignty within the trusteeship model Whereas the interaction between states and foreign nationals is the locus of cosmopolitan law, the relationship between states and indigenous peoples is distinctive In the ordinary cosmopolitan case, foreign nationals do not purport to possess legal authority Indigenous peoples often do make such a claim, pitting their claim to authority against the state's We discuss how international law has attempted to come to grips with indigenous sovereignty by requiring states to include indigenous peoples in decision-making processes that affect their historical lands and rights A crucial fault line in the jurisprudence, however, separates a duty to consult indigenous peoples from a duty to acquire their free, prior and informed consent (FPIC) The latter but not the former recognizes that indigenous peoples possess a veto over state projects on their lands, in effect recognizing in them a limited co-legislative power We focus on recent jurisprudence from the Inter-American Court of Human Rights, and consider whether either the duty to consult or FPIC are enough to dispel the shadow of the trusteeship model’s colonial past We suggest that at the very least they are a move in the right direction, and that implicitly they represent international law's recognition that states are no longer the sole bearers of sovereignty at international law In limited circumstances, international law recognizes indigenous peoples as sovereign actors
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TL;DR: In this article, the authors introduce regime switching parameters in the Mixed-Frequency VAR (MSMF-VAR) model and assess the finite sample performance of the technique in Monte-Carlo experiments.
Abstract: This paper introduces regime switching parameters in the Mixed-Frequency VAR model. We first discuss estimation and inference for Markov-switching Mixed-Frequency VAR (MSMF-VAR) models. Next, we assess the finite sample performance of the technique in Monte-Carlo experiments. Finally, the MSMF-VAR model is applied to predict GDP growth and business cycle turning points in the euro area. Its performance is compared with that of a number of competing models, including linear and regime switching mixed data sampling (MIDAS) models. The results suggest that MSMF-VAR models are particularly useful to estimate the status of economic activity.
TL;DR: In this article, the authors analyzed the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel, and they found that credit rating downgrades are associated with an immediate and persistent decline in access to noncore deposits and wholesale funding, especially during the global financial crisis.
Abstract: We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis. This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency.