Central Bank Crisis Interventions and the Term Structure of Market Fear Staff working paper 2026-17 Mattia Bevilacqua, Jon Danielsson, Lerby Ergun, Andreas Uthemann, Jean-Pierre Zigrand How do central bank crisis interventions calm market fears? Using options data, we measure the perceived risk of large asset price drops across horizons from two weeks to ten years. Studying the Fed's response to the 2020 turmoil, we find asset purchases reduce short-term fears while interest rate actions shape long-term expectations. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C58, E, E5, E58, G, G0, G01, G1, G12, G15 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Models and tools, Econometric, statistical and computational methods
Assessing the US and Canadian neutral rates: 2026 update Staff analytical paper 2026-21 Felipe Alves, William Beaudoin, Hélène Desgagnés, Wei Dong, Jan David Schneider, Eugene Trostin, Argyn Toktamyssov, Hannes Twieling We assess the Canadian nominal neutral rate to be in the range of 2.25% to 3.25%, unchanged from our assessment in 2025. We assess the US nominal neutral rate to be in the range of 2.50% to 3.50%, somewhat higher than the range of 2.25% to 3.25% reported in the 2025 assessment. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E4, E43, E5, E52 Research Theme(s): Monetary policy, Monetary policy framework and transmission
Assessing global potential output growth: April 2026 Staff analytical paper 2026-20 Daniel de Munnik, Kristina Hess, Walter Muiruri, Tuuli McCully, Faiza Noor, Sabreena Obaid, Andrew Plummer, Louis Poirier, Abeer Reza, Jillian Schwartz We present the annual update of the Bank of Canada staff estimates for global potential output growth. These estimates served as key inputs to the analysis supporting the April 2026 Monetary Policy Report. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E1, E2, F, F0, F1, O, O3, O33, O4 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply, Digitalization and productivity
Potential output in Canada: 2026 assessment Staff analytical paper 2026-19 Alex Chernoff, Christopher Hajzler, Stéphanie Houle, Gabriella Ruggero, Olena Senyuta, Karanbir Sohal, Walter Steingress, Temel Taskin Growth in potential output is expected to drop from 2.3% in 2025 to 1.2% in 2026 given slowing population growth, US tariffs and trade policy uncertainty. It is then estimated to pick up to an average of 1.5% over 2027–29 as strengthening business and government investment supports trend labour productivity (TLP). Gradual adoption of artificial intelligence is also expected to lift TLP growth over the projection horizon. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E2, E3, E4, E5 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Climate Change and Socio-economic inequality in the US Staff working paper 2026-16 Barbara Sadaba, Tatjana Dahlhaus This paper examines how climate change affects income inequality across US states. Using a new climate-inequality VAR and a century of daily temperature data, it shows that shifts across the full temperature distribution—not just average warming—have diverse effects on within-state inequality. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C11, C3, C32, D, D6, D63, Q, Q5, Q54 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Structural challenges, Climate change
Distributing Sovereign Debt in a Rising Debt Environment: Outcomes from Canada’s 2024 Debt Distribution Framework Review Staff analytical paper 2026-18 William Bradley, Jeffrey Gao This paper documents Canada’s recent review of its sovereign debt distribution framework (DDF). Informed by a context of record-high debt issuance since the previous DDF review, along with comparisons with sovereign peers and insights from market participants, the review identified an important need to broaden Canada’s dealer base internationally to support a larger and more diverse set of investors. Content Type(s): Staff research, Staff analytical paper JEL Code(s): G, G1, G18, G2, G28, H, H6, H63 Research Theme(s): Financial markets and funds management, Funds management, Market functioning, Market structure, Financial system, Financial institutions and intermediation
Integrating Non-traditional Data and AI into Central Banking: A Canadian Perspective Staff analytical paper 2026-17 James Chapman, Ajit Desai, Maryam Haghighi, James (Jim) C. MacGee This paper reviews how central banks are integrating non traditional data and artificial intelligence (AI) into policy analysis and operations. Using the Bank of Canada’s experience, it examines emerging applications, governance challenges, and strategic choices for responsibly scaling AI to enhance insight, efficiency, and institutional resilience. Content Type(s): Staff research, Staff analytical paper JEL Code(s): C, C4, C45, C5, C55, C8, C88, L, L2, L23, M, M1, M15, O, O3, O33 Research Theme(s): Financial system, Financial stability and systemic risk, Monetary policy, Monetary policy tools and implementation, Money and payments, Payment and financial market infrastructures
Communicating the Future Direction of Policy Staff analytical paper 2026-16 Jonathan Witmer, Monica Jain This note discusses several ways the BoC could increase communication around future policy, leveraging methods other central banks have used, and discussing the pros and cons of each method for the BoC, keeping in mind that policy rate forecasts typically are not informative beyond 1 or 2 quarters. Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D8, D83, E, E5, E58 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
How Canada’s counter-tariffs impacted consumer prices Sparks at Bank article Alberto Cavallo, Olena Kostyshyna, Oleksiy Kryvtsov, Matías Vieyra For six months in 2025, Canada imposed counter tariffs on a wide range of goods from the United States. This short and well defined episode offers a unique opportunity to examine how Canadian retailers adjust prices in response to tariffs—and how retailers’ expectations and transparency with consumers affect pricing decisions. Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures, Structural challenges, International trade, finance and competitiveness
Patterns and Determinants of Global Cryptocurrency Flows Staff working paper 2026-15 Christian Friedrich, Laura Zhao This paper analyzes cross-border cryptocurrency flows, focusing on Bitcoin and four major stablecoins. Using data for 162 countries, we identify the key determinants, including responses to weak economic conditions and demand for remittances. A COVID-19 case study supports these findings and emphasizes the role of cryptocurrencies in global finance. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, F, F3, F32, F38, F5, F51, G, G1, G15, G2, G23 Research Theme(s): Money and payments, Digital assets and fintech