Supply Shocks in the Fog: The Role of Endogenous Uncertainty Staff working paper 2026-12 Anastasiia Antonova, Mykhailo Matvieiev, Celine Poilly Recessions feature elevated uncertainty. We develop a nonlinear imperfect-information New Keynesian model where procyclical information quality generates endogenous countercyclical uncertainty and precautionary saving. This demand channel can overturn the inflationary impact of negative supply shocks, making them deflationary, unless monetary policy stabilizes the output gap. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D8, D81, D83, E, E2, E21, E3, E32, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
May 16, 2016 Estimating Canada’s Effective Lower Bound Bank of Canada Review - Spring 2016 Jonathan Witmer, Jing Yang Recently, the Bank of Canada has estimated the effective lower bound (ELB) on its policy interest rate to be about -50 basis points. This article outlines the analysis that underpins that estimate by quantifying the costs of storing and using cash in Canada. It also explores how some international markets have adapted to negative interest rates, issues surrounding their implementation, as well as their transmission to other interest rates in the economy. Finally, it discusses theoretical ideas on how the ELB could be reduced further. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): D, D5, D53, E, E4, E43, E5, E52, E58
February 5, 2026 Structural change—Canada at a crossroads Remarks Tiff Macklem Empire Club of Canada Toronto, Ontario Governor Tiff Macklem discusses how structural change—driven by U.S. protectionism, AI, and slowing population growth—is reshaping Canada’s economy. He outlines the Bank’s role in maintaining low and stable inflation while helping the economy through the transition. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Monetary policy, Economy/Economic growth, Inflation
Forecasting Recessions in Canada: An Autoregressive Probit Model Approach Staff working paper 2024-10 Antoine Poulin-Moore, Kerem Tuzcuoglu We forecast recessions in Canada using an autoregressive (AR) probit model. The results highlight the short-term predictive power of the US economic activity and suggest that financial indicators are reliable predictors of Canadian recessions. In addition, the suggested model meaningfully improves the ability to forecast Canadian recessions, relative to a variety of probit models proposed in the Canadian literature. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C51, C53, E, E3, E32 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting
What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data Staff working paper 2021-52 Alberto Cavallo, Oleksiy Kryvtsov Did supply disruptions and cost pressures play a role in rising inflation in 2020 during the COVID-19 pandemic? Using data collected from websites of large retailers in multiple sectors and countries, we show that shortages may indicate transitory inflationary pressures. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D2, D22, E, E3, E31, E37 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
Wage Growth in Canada and the United States: Factors Behind Recent Weakness Staff analytical note 2017-8 Dany Brouillette, James Ketcheson, Olena Kostyshyna, Jonathan Lachaine This note examines the relatively subdued pace of wage growth in Canada since the commodity price decline in 2014 and assesses whether the weakness is attributable to cyclical (e.g., labour market slack) or structural factors (e.g., resource reallocation and demographic change). Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E2, E24, J, J3, J30 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting, Structural challenges, Demographics and labour supply
Markups and Inflation in Oligopolistic Markets: Evidence from Wholesale Price Data Staff working paper 2024-20 Patrick Alexander, Lu Han, Oleksiy Kryvtsov, Ben Tomlin We study how the interaction of market power and nominal price rigidity influences inflation dynamics. We find that pass-through declines with price stickiness when markets are concentrated, which implies a lower slope of the New Keynesian Phillips curve. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D4, D43, E, E3, E31, L, L1, L13, L8, L81 Research Theme(s): Financial markets and funds management, Market structure, Monetary policy, Inflation dynamics and pressures
May 21, 2013 Canada Works Remarks Mark Carney Chambre de commerce du Montréal métropolitain (CCMM)/Board of Trade of Metropolitan Montreal Montréal, Quebec Bank of Canada Governor Mark Carney discusses the “cornerstones of Canada’s prosperity.” Content Type(s): Press, Speeches and appearances, Remarks
April 18, 2017 Blame It on the Machines? Remarks Carolyn A. Wilkins Toronto Region Board of Trade Toronto, Ontario Senior Deputy Governor Carolyn A. Wilkins discusses how automation could affect productivity and the Bank’s monetary policy. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Financial system, Financial stability, Fintech, Monetary policy, Economy/Economic growth, Inflation targeting framework
Allocative Efficiency and the Productivity Slowdown Staff working paper 2021-1 Lin Shao, Rongsheng Tang In our analysis of the US productivity slowdown in the 1970s and 2000s, we find that a significant portion of this deceleration can be attributed to a lack of improvement in allocative efficiency across sectors. Our analysis further identifies increased sector-level volatility as a major contributor to this lack of improvement in allocative efficiency. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E23, O, O4, O47 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting, Structural challenges, Digitalization and productivity