Bio

José Dorich was appointed Deputy Managing Director of the Bank’s International Economic Analysis Department (INT), effective August 16, 2021. In this capacity, he is a member of the Bank’s senior management team, contributing to the strategic direction of INT and providing leadership on the analysis of global economic conditions.

Mr. Dorich joined the Bank in 2008 as a Senior Analyst in the Canadian Economic Analysis Department (CEA). Since then, he has held increasingly senior positions. In 2014, he became Director of the Model Development Division in CEA. In this role, he led, coordinated and conducted research supporting the 2016 renewal of the inflation-control agreement. He also led the team responsible for the development of ToTEM III, the most recent version of the Bank’s main structural macroeconomic model. In 2019, he became Senior Policy Director in INT, a position from which he oversaw the divisions in that department responsible for commodities, model development and the global projection.

Throughout his career, Mr. Dorich has accumulated significant knowledge and expertise in model development and monetary policy analysis. His primary research interests include macroeconomic theory, monetary economics and applied macroeconomics. Specific topics include inflation dynamics, the neutral rate of interest, unconventional monetary policies and monetary framework issues.

Born in Lima, Perú, Mr. Dorich holds a PhD in Economics from Universitat Pompeu Fabra.

Staff analytical notes

The Neutral Rate in Canada: 2019 Update

Staff Analytical Note 2019-11 Thomas J. Carter, Xin Scott Chen, José Dorich
This note provides an update on Bank of Canada staff’s assessment of the Canadian neutral rate. The neutral rate is the policy rate needed to keep output at its potential level and inflation at target once the effects of any cyclical shocks have dissipated. This medium- to long-run concept serves as a benchmark for gauging the degree of monetary stimulus provided by a given policy setting.
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

Weakness in Non-Commodity Exports: Demand versus Supply Factors

Staff Analytical Note 2018-28 José Dorich, Vadym Lepetyuk, Jonathan Swarbrick
We use the Terms-of-Trade Economic Model (ToTEM) to conduct demand- and supply-driven simulations, both of which deliver weakness in Canadian non-commodity exports relative to foreign activity in line with recent data.
Content Type(s): Staff research, Staff analytical notes Topic(s): International topics, Monetary policy, Recent economic and financial developments, Trade integration JEL Code(s): E, E5, E52, F, F1, F10, F14, F17

What Is Restraining Non-Energy Export Growth?

Staff Analytical Note 2018-25 Dany Brouillette, José Dorich, Chris D'Souza, Adrienne Gagnon, Claudia Godbout
This note summarizes the key findings from Bank of Canada staff analytical work examining the reasons for the recent weakness in Canadian non-energy exports. Canada steadily lost market share in US non-energy imports between 2002 and 2017, mostly reflecting continued and broad-based competitiveness losses.
Content Type(s): Staff research, Staff analytical notes Topic(s): International topics, Monetary policy, Recent economic and financial developments, Trade integration JEL Code(s): E, E5, E52, F, F1, F10, F14, F17

The Neutral Rate in Canada: 2018 Estimates

Staff Analytical Note 2018-22 Xin Scott Chen, José Dorich
The neutral nominal policy rate serves as a benchmark for assessing the degree of monetary stimulus and provides a medium- to long-run anchor for the policy rate. Since quantitative measures of the neutral rate are subject to considerable uncertainty, Bank staff rely on four different approaches to estimate the Canadian neutral rate.
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

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Staff discussion papers

The Bank of Canada’s “Horse Race” of Alternative Monetary Policy Frameworks: Some Interim Results from Model Simulations

Staff Discussion Paper 2021-13 José Dorich, Rhys R. Mendes, Yang Zhang
Bank of Canada staff are running a “horse race” of alternative monetary policy frameworks in the lead-up to 2021 renewal of the Bank’s monetary policy framework. This paper summarizes some interim results of model simulations from their research.
Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Economic models, Inflation targets, Monetary policy, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E2, E27, E3, E4, E5, E52, E58

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Staff working papers

Could a Higher Inflation Target Enhance Macroeconomic Stability?

Staff Working Paper 2018-17 José Dorich, Nicholas Labelle, Vadym Lepetyuk, Rhys R. Mendes
Recent international experience with the effective lower bound on nominal interest rates has rekindled interest in the benefits of inflation targets above 2 per cent. We evaluate whether an increase in the inflation target to 3 or 4 per cent could improve macroeconomic stability in the Canadian economy.
Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Inflation targets, Monetary policy framework JEL Code(s): E, E3, E32, E37, E4, E43, E5, E52

Resurrecting the Role of Real Money Balance Effects

Staff Working Paper 2009-24 José Dorich
I present a structural econometric analysis supporting the hypothesis that money is still relevant for shaping inflation and output dynamics in the United States. In particular, I find that real money balance effects are quantitatively important, although smaller than they used to be in the early postwar period.
Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary aggregates, Monetary policy transmission JEL Code(s): E, E3, E31, E32, E5, E52

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Technical reports

ToTEM III: The Bank of Canada’s Main DSGE Model for Projection and Policy Analysis

Technical Report No. 119 Paul Corrigan, Hélène Desgagnés, José Dorich, Vadym Lepetyuk, Wataru Miyamoto, Yang Zhang
ToTEM III is the most recent generation of the Bank of Canada’s main dynamic stochastic general equilibrium model for projection and policy analysis. The model helps Bank staff tell clear and coherent stories about the Canadian economy’s current state and future evolution.
Content Type(s): Staff research, Technical reports Topic(s): Business fluctuations and cycles, Economic models, Housing, Interest rates, Monetary policy JEL Code(s): E, E1, E17, E2, E20, E3, E30, E4, E40, E5, E50, E6, E62, E65, F, F4, F40, F41, G, G5, G51

ToTEM II: An Updated Version of the Bank of Canada’s Quarterly Projection Model

Technical Report No. 100 José Dorich, Michael K. Johnston, Rhys R. Mendes, Stephen Murchison, Yang Zhang
This report provides a detailed technical description of an updated version of the Terms-of-Trade Economic Model (ToTEM II), which replaced ToTEM (Murchison and Rennison 2006) in June 2011 as the Bank of Canada’s quarterly projection model for Canada.
Content Type(s): Staff research, Technical reports Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): E, E1, E17, E2, E20, E3, E30, E4, E40, E5, E50, F, F4, F41

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Bank publications

Bank of Canada Review articles

November 16, 2017

An Update on the Neutral Rate of Interest

Bank of Canada Review - Autumn 2017 José Dorich, Abeer Reza, Subrata Sarker
The neutral rate serves as a benchmark for measuring monetary stimulus and provides a medium- to long-run anchor for the real policy rate. Global neutral rate estimates have been falling over the past few decades. Factors such as population aging, high corporate savings, and low trend productivity growth are likely to continue supporting a low global neutral rate. These global factors as well as domestic factors are exerting downward pres-sure on the Canadian real neutral rate, which is estimated to be between 0.5 to 1.5 per cent. This low neutral rate has important implications for monetary policy and financial stability.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Interest rates, International topics, Potential output, Recent economic and financial developments JEL Code(s): E, E4, E43, E5, E52, E58, F, F0, F01, F4, F43, O, O4
August 18, 2011

Introducing Multiple Interest rates in ToTEM

Bank of Canada Review - Summer 2011 José Dorich, Rhys R. Mendes, Yang Zhang
This article describes changes to the structure of ToTEM—the Bank of Canada’s main model for projection and policy analysis—that allow an independent role for long-term interest rates, as well as for the risk spreads that lead to differences in the interest rates faced by households, firms and the government. These changes broaden the range of policy questions that the model can address and improve its ability to explain data. The authors use the model to simulate the effects of shocks to the risk spreads on interest rates similar to those that occurred during the recent financial crisis. They also use the model to assess the macroeconomic impact of higher requirements for bank capital and liquidity.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Economic models, Financial system regulation and policies, Interest rates

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The Economy, Plain and Simple

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Journal publications

Other research

  • “Price Level Targeting, the Zero Lower Bound on the Nominal Interest Rate and Imperfect Credibility”
    (with Gino Cateau)
  • “Imperfect Asset Substitution in a Small Open Economy Model”
    (with Rhys Mendes and Yang Zhang)
  • “Forward-Looking versus Backward-Looking Behavior in Inflation Dynamics: a New Test”
  • “The Welfare Losses of Price Rigidities”