The Neutral Rate in Canada: 2019 Update Staff analytical note 2019-11 Thomas J. Carter, Xin Scott Chen, José Dorich This note provides an update on Bank of Canada staff’s assessment of the Canadian neutral rate. The neutral rate is the policy rate needed to keep output at its potential level and inflation at target once the effects of any cyclical shocks have dissipated. This medium- to long-run concept serves as a benchmark for gauging the degree of monetary stimulus provided by a given policy setting. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission
Resilience of bank liquidity ratios in the presence of a central bank digital currency Staff analytical note 2022-5 Alissa Gorelova, Bena Lands, Maria teNyenhuis Could Canadian banks continue to meet their regulatory liquidity requirements after the introduction of a cash-like retail central bank digital currency (CBDC)? We conduct a hypothetical exercise to estimate how a CBDC could affect bank liquidity by increasing the run-off rates of transactional retail deposits under four increasingly severe scenarios. Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, E, E4, G, G2, G21, O, O3, O33 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Money and payments, Digital assets and fintech
Exploring Wage Phillips Curves in Advanced Economies Staff discussion paper 2019-8 Rose Cunningham, Vikram Rai, Kristina Hess We investigate the extent to which excess supply (demand) in labour markets contributes to a lower (higher) growth rate of average nominal wages for workers. Using panel methods on data from 10 advanced economies for 1992–2018, we produce reduced-form estimates of a wage Phillips curve specification that is consistent with a New Keynesian framework. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C3, C33, E, E3, E31, E32 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Structural challenges, Demographics and labour supply
Assessing Global Potential Output Growth Staff analytical note 2017-3 Patrick Alexander, Michael Francis, Christopher Hajzler, Patrick Kirby, Louis Poirier, Sri Thanabalasingam, Kristina Hess This note estimates potential output growth for the global economy through 2019. While there is considerable uncertainty surrounding our estimates, overall we expect global potential output growth to rise modestly, from 3.1 per cent in 2016 to 3.4 per cent in 2019. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E1, E10, E2, E20, O, O4 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply, Digitalization and productivity
June 21, 2007 Financial System Review - June 2007 The Financial System Review is one vehicle that the Bank of Canada uses to contribute to the strength of the Canadian financial system. The Developments and Trends section of the Review aims to provide analysis and discussion of current developments and trends in the Canadian financial sector. Content Type(s): Publications, Financial Stability Report
November 12, 2020 Exploring life after COVID-19: the far side of the moon Remarks (delivered virtually) Carolyn A. Wilkins Munk School of Global Affairs and Public Policy Toronto, Ontario Senior Deputy Governor Carolyn A. Wilkins discusses what the economy will need once we’re past the COVID-19 crisis. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Financial system, Financial stability, Monetary policy, Economy/Economic growth, Inflation, Inflation targeting framework
Deriving Longer-Term Inflation Expectations and Inflation Risk Premium Measures for Canada Staff discussion paper 2024-9 Bruno Feunou, Zabi Tarshi We present two models for long-term inflation expectations and inflation risk premiums for Canada. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C5, C58, E, E4, E43, E47, G, G1, G12 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
August 24, 2004 Bank of Canada Review - Summer 2004 Cover page Promissory Note, 1712 The note measures 28 cm x 16 cm and forms part of the National Currency Collection, Bank of Canada. Photography by Gord Carter, Ottawa Content Type(s): Publications, Bank of Canada Review
Corporate investment and monetary policy transmission in Canada Staff analytical note 2020-26 Min Jae Kim, Jonathan Witmer Unexpected changes in interest rates lead small firms to materially change their investment rate. Large firms, in contrast, show a smaller response. This suggests both that financial conditions are an important channel for transmitting monetary policy and that firm characteristics can help us better understand fluctuations in business investment. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D2, D22, D9, D92, G, G3, G31, G32 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission
February 23, 2012 Medium-Term Fluctuations in Canadian House Prices Bank of Canada Review - Winter 2011-2012 Brian Peterson, Yi Zheng This article draws on theory and empirical evidence to examine a number of factors behind movements in Canadian house prices. It begins with an overview of the movements in house prices in Canada, using regional data to highlight factors that influence prices over the long run. It then turns to the central theme, that there are medium-run movements in prices not accounted for by long-run factors. Drawing on recent Bank of Canada research, the article discusses several factors behind these medium-run movements, including interest rates, expected price appreciation and market liquidity. The article concludes by identifying areas for future research that would further our understanding of fluctuations in house prices. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): R, R2, R21, R3, R31