Staff analytical notes are short articles that focus on topical issues relevant to the current economic and financial context.
234
result(s)
Impacts of interest rate hikes on the consumption of households with a mortgage
Staff Analytical Note 2024-14
Panagiotis Bouras,
Joaquín Saldain,
Xing Guo,
Thomas Michael Pugh,
Maria teNyenhuis
We assess how much the recent rate-hike cycle has and will affect mortgage borrowers' consumption through its impacts on mortgage payments. Our analysis provides insights into the effects of changes in monetary policy on the consumption of mortgage borrowers.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Interest rates,
Monetary policy,
Recent economic and financial developments
JEL Code(s):
D,
D1,
D13,
E,
E2,
E21,
G,
G5
Sources of pandemic-era inflation in Canada: an application of the Bernanke and Blanchard model
Staff Analytical Note 2024-13
Fares Bounajm,
Jean Garry Junior Roc,
Yang Zhang
We explore the drivers of the surge in inflation in Canada during the COVID-19 pandemic. This work is part of a joint effort by 11 central banks using the model developed by Bernanke and Blanchard (2023) to identify similarities and differences across economies.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Economic models,
Inflation and prices,
Labour markets
JEL Code(s):
E,
E2,
E24,
E3,
E31,
E37,
E5,
E52,
E6
Total factor productivity growth projection for Canada: A sectoral approach
Staff Analytical Note 2024-12
Dany Brouillette,
Tessa Devakos,
Raven Wheesk
We propose a tool that decomposes TFP growth into sectoral contributions. The analysis incorporates three structural factors—digitalization, aging and climate change policies—and measures their contributions. Overall, we expect that aggregate TFP growth will slow down in the 2020s below both its historical average and the average from the 2010s.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Climate change,
Digitalization,
Labour markets,
Productivity
JEL Code(s):
D,
D2,
D24,
J,
J1,
J11,
O,
O3,
O33,
Q,
Q5,
Q54
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 global potential output growth: April 2024
Staff Analytical Note 2024-10
Amor Aniss Benmoussa,
Raheeb Dastagir,
Eshini Ekanayake,
Justin-Damien Guénette,
Helen Lao,
Jenna Rolland-Mills,
Aidan Spencer,
Lin Xiang
This note presents the annual update of Bank of Canada staff estimates for growth in global potential output. These estimates serve as key inputs to the analysis supporting the April 2024 Monetary Policy Report.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Potential output,
Productivity
JEL Code(s):
E,
E1,
E2,
F,
F0,
O,
O4
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
Liquidity risks at Canadian life insurance companies
Staff Analytical Note 2024-7
Patrick Aldridge,
Stephane Gignac,
Rishi Vala,
Adrian Walton
We examine how life insurers manage liquidity risks created by their business model. We find that Canadian life insurers did not face significant liquidity draws and continued their usual investment behaviour during the COVID-19 crisis and as interest rates increased in 2022.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Coronavirus disease (COVID-19),
Financial institutions,
Financial markets,
Financial stability,
Market structure and pricing
JEL Code(s):
D,
D4,
D47,
D5,
D53,
G,
G1,
G12,
G14,
G2,
G23
Pricing behaviour and inflation during the COVID-19 pandemic: Insights from consumer prices microdata
Staff Analytical Note 2024-6
Olga Bilyk,
Mikael Khan,
Olena Kostyshyna
Using the microdata underlying the Canadian consumer price index, we study how often and by how much firms changed their prices during the COVID-19 pandemic. We find that the surge in inflation was mainly associated with retailers raising prices much more often than before. We also find that more recently, corporate price-setting behaviour appears to be approaching pre-pandemic norms.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Firm dynamics,
Inflation and prices,
Recent economic and financial developments
JEL Code(s):
D,
D2,
D22,
E,
E3,
E31,
L,
L1,
L11