Explainers

A central bank works to ensure a country’s economic stability and its citizens’ financial well-being.

At the Bank of Canada, we cover the cost of day-to-day business with “seigniorage,” which means earning money from issuing bank notes.

QE is a tool that encourages spending and investment—helping us to achieve our inflation target by stabilizing the economy.

At the heart of the Bank of Canada’s monetary policy is the target for the overnight rate. See what it is—and what it means for you.

The output gap is the difference between what an economy actually produces and what it would produce in an ideal world.

High productivity helps raise our standard of living and keep our economy competitive.

The consumer price index (CPI) tracks how much the average Canadian household spends, and how that changes over time. At the Bank of Canada, we use it to target inflation.

It takes time for our policy decisions to filter—or be transmitted—through the economy and financial system.

At the Bank of Canada, we aim to keep inflation close to 2 percent.

Inflation is a persistent rise in the average level of prices over time.

The foreign exchange market determines how much the Canadian dollar is worth. At the Bank of Canada, we very rarely intervene to support its value.

Here's what money does—and how we’re handling it in the digital age.

Highlights the value of ‘prudent’ borrowing in enhancing welfare, but also the risks of over-indebtedness for households, the economy and financial stability. Discusses trends in household debt, various debt metrics and why monetary policy is concerned with how households use borrowed funds.