Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited Foresight Staff working paper 2021-51 Michael Woodford, Yinxi Xie How do outcomes of monetary and fiscal stabilization policies at the zero lower bound change when decision makers have finite planning horizons in the economy? We explore the effects of limited foresight on policy tools and the interaction between monetary and fiscal policy. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E52, E6, E63, E7 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting
February 8, 2016 Monetary Policy and Financial Stability—Looking for the Right Tools Remarks Timothy Lane HEC Montréal Montréal, Quebec Deputy Governor Tim Lane discusses the links between monetary policy and financial stability. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Financial system, Financial stability, Monetary policy, Economic models, Inflation, Inflation targeting framework
Capital Flows to Developing Countries: Is There an Allocation Puzzle? Staff working paper 2016-53 Josef Schroth Foreign direct investment inflows are positively related to growth across developing countries—but so are savings in excess of investment. I develop an explanation for this well-established puzzle by focusing on the limited availability of consumer credit in developing countries together with general equilibrium effects. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E13, E2, E21, F, F4, F43 Research Theme(s): Financial system, Financial stability and systemic risk, Structural challenges, International trade, finance and competitiveness
Consumers’ Path to Mortgage Delinquency Staff analytical paper 2026-3 Laura Zhao, Jia Qi Xiao, Aidan Witts Analyzing TransUnion data from 2015–2024, this study identifies a systematic timeline of distress where rising credit utilization and non-mortgage arrears precede mortgage delinquency by up to two years. This deterioration intensifies in the final six months, providing a robust suite of high-frequency indicators for monitoring emerging household stress. Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D1, D14, G, G2, G21, G5, G51 Research Theme(s): Financial system, Financial system regulation and oversight, Household and business credit
Assessing Global Potential Output Growth: April 2019 Staff analytical note 2019-13 Fares Bounajm, Jean-Philippe Cayen, Michael Francis, Christopher Hajzler, Kristina Hess, Guillaume Poulin-Bellisle, Peter Selcuk This note presents the updated estimates of potential output growth for the global economy through 2021. Global potential output is expected to grow by 3.3 per cent per year over the projection horizon. 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, International trade, finance and competitiveness
From He-Cession to She-Stimulus? The Labor Market Impact of Fiscal Policy Across Gender Staff working paper 2021-42 Alica Ida Bonk, Laure Simon The effects of fiscal policy shocks on labour market outcomes across gender depend on the type of public expenditure. Women benefit most from increases in the government wage bill, while men are the main beneficiaries of higher investment spending. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E6, E62, J, J1, J16, J2, J21 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply
Monetary Policy in an AI-Driven Two-Speed Economy Staff working paper 2026-27 Joshua Brault, Maryam Haghighi, Jing Yang We analyze monetary policy responses to AI in a two-sector New Keynesian model, distinguishing augmentation and automation. Both reduce labor demand, requiring accommodation that creates inflation trade-offs. Automation worsens them. Aggregate inflation depends on AI’s form and breadth, making policy stabilization more complex and aggregate data potentially misleading. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E24, E3, E31, E32, E5, E52, J, J2, J23, O, O3, O33 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Structural challenges, Digitalization and productivity
Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada Staff discussion paper 2018-18 Thomas J. Carter, Rhys R. Mendes, Lawrence L. Schembri In 1991, Canada became the second country to adopt an inflation target as a central pillar of its monetary policy framework. The regime has proven much more successful than initially expected, both in achieving price stability and in stabilizing the real economy against a wide range of shocks. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E5, E52, E58, E6, E61 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
Exports and the Exchange Rate: A General Equilibrium Perspective Staff working paper 2022-18 Patrick Alexander, Abeer Reza How do a country’s exports change when its currency depreciates? Does it matter which forces drive the exchange rate deprecation in the first place? We find that this relationship varies greatly depending on what drives exchange rate movements, and we conclude that the direct relationship between the exchange rate and exports is weak for Canada. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F3, F31, F32, F33, F4, F41 Research Theme(s): Financial markets and funds management, International markets and currencies, Models and tools, Economic models, Structural challenges, International trade, finance and competitiveness
Financial Intermediaries and the Macroeconomy: Evidence from a High-Frequency Identification Staff working paper 2022-24 Pablo Ottonello, Wenting Song We provide empirical evidence of effects to the aggregate economy from surprises about financial intermediaries’ net worth based on a high-frequency identification strategy. We estimate that news of a 1% decline in intermediaries’ net worth leads to a 0.2%–0.4% decrease in the market value of nonfinancial firms. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E4, E44, E5, E51, G, G0, G01, G1, G12, G2, G21, G23, G24, G3, G32 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Household and business credit, Monetary policy, Real economy and forecasting