Discount Rates, Debt Maturity, and the Fiscal Theory Staff Working Paper 2021-58 Alexandre Corhay, Thilo Kind, Howard Kung, Gonzalo Morales Do bond risk premiums influence the effects of debt maturity operations? Using a model with realistic bond risk premiums, we show that maturity operations have sizable effects on expected inflation and output when the central bank passively responds to inflation and the fiscal authority weakly responds to the debt level. Content Type(s): Staff research, Staff working papers Research Topic(s): Fiscal policy, Interest rates, Monetary policy JEL Code(s): E, E4, E43, E44, E6, E63, G, G1, G12
November 23, 2021 Financial stability through the pandemic and beyond Remarks (delivered virtually) Paul Beaudry OSC Dialogue, Ontario Securities Commission Toronto, Ontario Deputy Governor Paul Beaudry provides an update on financial vulnerabilities and risks in Canada, including those stemming from the COVID-19 pandemic. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Asset pricing, Central bank research, Climate change, Coronavirus disease (COVID-19), Financial institutions, Financial stability, Housing, Interest rates
November 22, 2021 Operational details for upcoming secondary market purchases of Government of Canada securities (November 29-December 10) As previously announced, the Bank of Canada (the Bank) launched on April 1, 2020 a program to purchase Government of Canada securities in the secondary market – the Government Bond Purchase Program (GBPP). Content Type(s): Press, Market notices Source(s): Government of Canada Bond Purchase Program
Optimal Monetary Policy According to HANK Staff Working Paper 2021-55 Sushant Acharya, Edouard Challe, Keshav Dogra We study optimal monetary policy in an analytically tractable Heterogeneous Agent New Keynesian model. In the model, the central bank has an incentive to reduce consumption inequality in addition to keeping economic activity at its efficient level and inflation stable. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Monetary policy JEL Code(s): E, E2, E21, E3, E30, E5, E52, E6, E62, E63
November 3, 2021 Bank of Canada announces climate change commitments for COP26 Media Relations Ottawa, Ontario Addressing climate change is a global challenge. While the Government of Canada has the primary responsibility for climate change policy, the Bank of Canada recognizes the importance of including climate change considerations in its work to promote the economic and financial welfare of Canadians. Content Type(s): Press, Press releases Research Topic(s): Climate change
October 27, 2021 Balance sheet operations for the reinvestment of proceeds of maturing Government of Canada bonds As announced on October 27, 2021, the Bank of Canada is ending quantitative easing and moving into the reinvestment phase effective November 1, 2021. Content Type(s): Press, Market notices Source(s): Government of Canada Bond Purchase Program
October 27, 2021 Bank of Canada maintains policy rate and forward guidance, ends quantitative easing Media Relations Ottawa, Ontario The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. Content Type(s): Press, Press releases
The impact of the Bank of Canada’s Government Bond Purchase Program Staff Analytical Note 2021-23 Rohan Arora, Sermin Gungor, Joe Nesrallah, Guillaume Ouellet Leblanc, Jonathan Witmer We assess the response of Government of Canada bond yields to the Bank of Canada’s initial announcement of the Government Bond Purchase Program (GBPP) as well as to the Bank’s later GBPP purchase operations. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Monetary policy, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E63