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This paper quantifies the contribution of sector-specific supply and demand shocks to personal consumption expenditure (PCE) inflation. It derives identification restrictions that are consistent with a large class of dynamic stochastic general equilibrium models with production networks.

Inflation expectations are important to monetary policy decision-makers. Using survey evidence, we examine how firms and consumers react to their inflation expectations during the post-pandemic period of high inflation.

This note presents PULSE, a new measure of underlying inflation in Canada based on a dynamic factor model estimated on disaggregated inflation data. PULSE captures the persistent component of inflation and decomposes it into broad-based and sector-specific inflationary pressures.

We analyze Canadian data from the Bank of Canada’s Business Leaders’ Pulse, examining firms’ sales growth expectations. We find that expected growth predicts outcomes, uncertainty influences forecast errors and revisions, and firms with weak past performance anticipate and experience weaker future growth. These results highlight the survey’s value for understanding business expectations.

Can artificial intelligence (AI) think and act like a cash manager? In this paper we explore how generative AI agents can help manage liquidity, prioritize payments and optimize efficiency in real-time gross settlement systems.

I study the links between Canadian banks and non-bank financial intermediaries (NBFIs) by observing co-movements in stock prices. Perceived interconnections increased before the COVID-19 pandemic but have since stabilized, with the strongest ties seen between large banks and NBFIs. The secured credit line extended to Home Trust, a non-bank mortgage lender that experienced severe funding stress in 2017, significantly reduced banks' risk exposure to NBFIs during this episode.

This article examines what market conditions lead to extreme losses in global financial systems. Using a reverse stress testing approach, it introduces two measures of systemic risk by starting from the tail losses and working backward to identify the events most closely associated with them.

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.

We present a technical description of the Top-Down Solvency Assessment (TDSA) tool. As a solvency stress-testing tool, TDSA is used to assess the banking sector’s capital resilience to hypothetical future risk scenarios.

This paper studies how financial shocks shape the distribution of output growth by introducing a quantile-augmented vector autoregression (QAVAR), which integrates quantile regressions into a structural VAR framework. The QAVAR preserves standard shock identification while delivering flexible, nonparametric forecasts of conditional moments and tail risk measures for gross domestic product.