Monetary policy

• Potential output in Canada: 2024 assessment

  Staff Analytical Note 2024-11 Tessa Devakos, Christopher Hajzler, Stephanie Houle, Craig Johnston, Antoine Poulin-Moore, Ron Rautu, Temel Taskin

  We expect that potential output in Canada will grow by 2.3% and 2.5% in 2023 and 2024, respectively, and average slightly below 1.7% by 2027 as population growth moderates. Relative to the April 2023 assessment, growth is revised up in 2024, with a larger contribution from trend labour input due to higher-than-anticipated population growth. We revise down our estimates of growth over 2025–26.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Economic models, Labour markets, Monetary policy, Potential output, Productivity JEL Code(s): E, E2, E3, E4, E5

• Assessing the US and Canadian neutral rates: 2024 update

  Staff Analytical Note 2024-9 Frida Adjalala, Felipe Alves, Hélène Desgagnés, Wei Dong, Dmitry Matveev, Laure Simon

  We assess both the US and Canadian nominal neutral rates to be in the range of 2.25% to 3.25%, somewhat higher than the range of 2.0% to 3.0% in 2023. The assessed range is back to the level it was at in April 2019.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41

• Benchmarks for assessing labour market health: 2024 update

  Staff Analytical Note 2024-8 Erik Ens, Alexander Lam, Kurt See, Gabriela Galassi

  We assess the health of the Canadian labour market. We find that it has seen gradual but material easing since 2023, amid some signs of structural changes.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Labour markets, Monetary policy JEL Code(s): E, E2, J, J2, J3, J6

• The Neutral Interest Rate: Past, Present and Future

  Staff Discussion Paper 2024-3 Matteo Cacciatore, Bruno Feunou, Galip Kemal Ozhan

  The decline in safe real interest rates over the past three decades has reignited discussions on the neutral real interest rate, known as R*. We address the determinants and estimation methods of R*, as well as the factors influencing its decline and its future trajectory.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Interest rates, Monetary policy, Monetary policy framework JEL Code(s): E, E4, E43, E5, E52, E6, E62