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 JEL Code(s): E, E2, E24, E3, E31, E37, E5, E52, E6 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
Which Model to Forecast the Target Rate? Staff working paper 2017-60 Bruno Feunou, Jean-Sébastien Fontaine, Jianjian Jin Specifications of the Federal Reserve target rate that have more realistic features mitigate in-sample over-fitting and are favored in the data. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E43 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
Differentiable, Filter Free Bayesian Estimation of DSGE Models Using Mixture Density Networks Staff working paper 2025-3 Chris Naubert I develop a method for Bayesian estimation of globally solved, non-linear macroeconomic models. The method uses a mixture density network to approximate the initial state distribution. The mixture density network results in more reliable posterior inference compared with the case when the initial states are set to their steady-state values. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C6, C61, C63, E, E3, E37, E4, E47 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models
Net Send Limits in the Lynx Payment System: Usage and Implications Staff discussion paper 2025-13 Virgilio B Pasin, Anna Wyllie We study how participants in the Lynx payment system use the net send limit (NSL) tool to control their intraday payment outflow levels. Our results show that participants typically adopt a “set it and forget it” approach to scheduling NSLs and sometimes have distinct intraday NSL adjustment behaviours. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C1, C10, D, D8, D82, E, E4, E42, E5, E58, G, G2, G21, G4, G41 Research Theme(s): Financial system, Financial institutions and intermediation, Money and payments, Payment and financial market infrastructures
January 29, 2025 Monetary Policy Report—January 2025—In focus—Recent factors affecting the Canada-US exchange rate The Canadian dollar has declined against the US dollar since October 2024, mostly due to rising uncertainty around trade policies. A widening differential in policy interest rates between the two countries has also played a modest role.
The Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model Staff discussion paper 2023-5 Martin Kuncl, Dmitry Matveev We use a small open economy model with overlapping generations to evaluate secular dynamics of the neutral rate in Canada from 1980 to 2018. We find that changes in both foreign and domestic factors resulted in a protracted decline in the neutral rate. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E2, E21, E22, E4, E43, E5, E50, E52, E58, F, F4, F41 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Structural challenges, Demographics and labour supply
January 24, 2012 Sectoral Default Rates under Stress: The Importance of Non-Linearities Financial System Review - June 2007 Miroslav Misina, David Tessier Content Type(s): Publications, Financial System Review articles
August 28, 2006 Productivity, Terms of Trade, and Economic Adjustment Remarks Pierre Duguay Canadian Association for Business Economics Kingston, Ontario The Bank of Canada is keenly interested in productivity - for a number of reasons. Productivity gains are a key determinant of growth in potential output and, hence, of Canada's sustainable pace of non-inflationary economic expansion. Content Type(s): Press, Speeches and appearances, Remarks
November 19, 2015 The Effect of Regulatory Changes on Monetary Policy Implementation Frameworks Bank of Canada Review - Autumn 2015 Meyer Aaron, Annick Demers, Sean Durr This article provides an analysis of some recent banking regulatory initiatives that are likely to influence the activities of financial intermediaries and the effectiveness of central bank monetary policy implementation frameworks. Although the effects of individual regulations can be anticipated in most cases, the combined regulatory impact is not yet clear. Central banks should, however, be able to accommodate the effects of the emerging regulatory environment within their existing policy implementation frameworks. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E5, E52, G, G2, G21, L, L5, L50
How do Canadian Corporate Bond Mutual Funds Meet Investor Redemptions? Staff analytical note 2018-14 Guillaume Ouellet Leblanc, Rohan Arora When investors redeem their fund shares for cash, fixed-income fund managers can choose whether to draw on their liquid holdings or sell bonds in the secondary market. We analyze the liquidity-management decisions of Canadian corporate bond mutual funds, focusing on the strategies they use to meet investor redemptions. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G1, G2, G20, G23 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Financial stability and systemic risk